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EU relations with the countries of the European Economic Area, with Switzerland and with Small European Countries

EU – EFTA AND EEA COUNTRY RELATIONS

The European Free Trade Association (EFTA) is an intergovernmental organisation set up to promote free trade and economic integration for the benefit of its four Member States (Iceland, Liechtenstein, Norway and Switzerland).

Three of the EFTA countries (Iceland, Liechtenstein and Norway) are members of the Agreement on the European Economic Area (EEA) with the European Union, signed on May 2, 1992 and entered into force on January 1, 1994. The EEA Agreement, which brings together the EU Member States and the three EFTA/EEA countries in a single market – referred to as “internal market” – gives Iceland, Liechtenstein and Norway the right to participate in a single market without having to be members of the European Union. This is on the basis of a Community acquis automatic adjustment process with respect to the internal market. It substantially extends the “four freedoms” of movement of the single market (free movement of goods, services, persons and capital) to the three EFTA/EEA countries, providing for joint decision-making bodies.

In exchange for the right to take full part in the internal market, the three EFTA/EEA countries agreed to help reduce social and economic inequality in the European Economic Area regions by providing grants for investment and development projects in certain priority areas (EEA Grants and Norway Grants).

 

EU – SWISS RELATIONS

EU-Swiss relations are currently regulated by approximately 120 bilateral agreements, primarily the 1972 Free Trade Agreement. In order to overcome this fragmentation and provide a unified and consistent framework, negotiations for an Institutional Framework Agreement (IFA) had been initiated in 2014 at the instigation of the EU. However, in May 2021, Switzerland announced its intention to terminate the IFA negotiations. For the time being, EU-Swiss relations remain governed by the still existing legal framework – for which, however, constant extensions and updates are necessary – which was intended to be partially overcome precisely through the IFA. As a neighbouring State, Italy has always encouraged the rebuilding of a climate of mutual trust and the resumption of negotiations between the EU and Switzerland.

EU – SMALL EUROPEAN STATES (REPUBLIC OF SAN MARINO, PRINCIPALITY OF MONACO AND PRINCIPALITY OF ANDORRA) RELATIONS

Negotiations have been in place between the small European States and the EU since March 2015 to progressively include them into the internal European market. Italy is still attentively following the developments of the negotiating sessions for one or more Association Agreements between the Republic of San Marino, the Principality of Monaco and the Principality of Andorra on the one side, and the European Commission, on the other, continuing to encourage dialogue among them. The conclusion of the Association Agreement with the three small States would further strengthen the internal European market, while the manufacturing sectors of the three small States would obtain significant economic openness to the EU market, subject to protecting their respective national specificities.