Norwegian grants are non-reimbursable funding schemes and aim to contribute, as general objectives, to reducing social and economic disparities in the European Economic Area, namely strengthening bilateral relations between Norway and beneficiary countries. Norwegian grants are also known as the Norwegian Financial Mechanism.
The successive enlargements of the European Union in 2004 and 2007 meant an increase of about 20% of the EU population, but a 5% increase in the EU’s Gross Domestic Product. Although significant progress has been registered both during the pre-accession and post-accession periods, it is noted that significant differences still exist between economic developments and living standards among EU countries. Thus, through its financial contribution, Norway supports the reduction of disparities, with the funds being targeted to meet the specific needs of beneficiary countries and, at the same time, taking into account the general European objectives.
Although the Kingdom of Norway is not part of the European Union, Norway, together with the countries of the European Free Trade Association (EFTA – Switzerland, Iceland, Liechtenstein and Norway respectively) are closely linked to European values and are equally responsible for promoting equality of opportunity, tolerance, security, environmental sustainability, and support decent living standards for all European citizens. It should be noted that the EFTA countries are part of the European Economic Area and have concluded bilateral agreements with the European Union, including agreements on contributions
Norway is the main contributor to the EEA Grants and the sole sponsor of the Norwegian Grants. For the period 2014-2021, EUR 2.8 billion has been allocated. EUR 1.5 billion of EEA grants are jointly funded by all three donors and are available in all 16 beneficiary countries. Norwegian grants of € 1.3 billion are funded exclusively by Norway and are available in the 15 countries that joined the EU after 2003.
For the 2014-2021 period, Romania was the first country to sign the Memoranda of Understanding on 13 October 2016 and benefits from an allocation of € 275.2 million through EEA grants and € 227.3 million through Norwegian grants (a total allocation of € 502 million).
The EEA and Norwegian Funds started in 1994, when the EEA Agreement between the European Union (EU) and three member states of the European Free Trade Association (EFTA) – Iceland, Liechtenstein and Norway – entered into force. The document provides the development of a single internal market governed by the concept of the four freedoms of movement: goods, services, capital and people. Thus, within the EEA, the EU Member States and the three mentioned EFTA States are included in a free trade area where citizens and economic operators have equal rights and obligations.
In order to respect the obligations arising from the status of Member State of the EEA for the period 2014-2021, and with purpose to reduce the social and economic disparities in the EEA, have been completed the Agreement between the Kingdom of Norway and the European Union on the Norwegian Financial Mechanism 2014-2021 and Protocol 38c to the EEA Agreement, documents governing the non-reimbursable financial support that the three States grant to some EU Member States. Negotiations between the three donor states and the EU on the EEA and Norwegian Financial Mechanisms started in 2014, and the MFN Agreement and Protocol 38C were signed on May 3, 2016.
For 2014-2021 period, both financial mechanisms have as their overarching objectives to support economic and social cohesion in Europe through economic growth and sustainable development and aim to further contribute to reducing economic and social disparities in the European Economic Area and strengthening bilateral relations between the Member States Donors (Norway, Iceland and Liechtenstein) and Beneficiary States through financial contributions in five priority sectors, as follows:
- Innovation, Research, Education and Competitiveness
- Social Inclusion, Youth Employment and Poverty Reduction
- Environment, Energy, Climate Change and Low Carbon Economy
- Culture, Civil Society, Good Governance, and Fundamental Rights and Freedoms
- Justice and Home Affairs
Within these priority sectors, 23 programming areas have been defined (see „Blue Book“).
In this respect, 2 Memorandums of Understanding between Iceland, Liechtenstein, Norway and Romania on the implementation of the MFSEE for the 2014-2021 programming period have been signed. These documents establish the national entities involved in the implementation of the Financial Mechanisms, their role and functions within the national management and control system, the list of sectors prioritization and financial allocation through the Financial Mechanisms 2014-2021, identifying programs approved for funding, with the main objectives and expected results, Program Operators, as well as the predefined projects accepted.
In order to optimize the implementation of the grants, for the period 2014-2021 there were selected 12 programs and the Program Operators were established on the basis of the results obtained during the 2009-2014 programming period, these being structures that have the necessary capacity and have achieved visible results in project implementation, MIA being selected for implementing Home Affairs Programme.
The Ministry of European Funds continues to fulfil the role of the National Focal Point and the Ministry of Public Finance will perform tasks of the Certifying and Paying Authority, as well as the Audit Authority (through UCAAPI), and the Irregularities Authority.
The Norwegian Financial Mechanism is also known as „Norway Grants”.