The history of the EEA and Norway Grants dates back to 1994 when the EEA Agreement entered into force. Since then, the funding has increased both in size and geographical scope
The Agreeement on the European Economic Area, which entered into force on 1 January 1994, brings together the 28 EU Member States and the three EEA EFTA States — Iceland, Liechtenstein and Norway — in a single market, referred to as the "internal market". The objective of the EEA and Norway Grants is to reduce social and economic disparities in the EEA, and they are intended to put the beneficiary countries in a better position to make use of the internal market.
An enlargement of the EU also entails an enlargement of the EEA. The EEA Agreement states that when a country becomes a member of the European Union, it shall apply to become party to the EEA Agreement (Article 128), thus leading to an enlargement of the EEA. As the political integration in Europa has gathered pace, the number of beneficiary countries of the EEA and Norway Grants, as well as the size of the funding from the EEA EFTA States, has grown substantially.
Over the years, EFTA’s membership has also changed. When Finland, Sweden and Austria left EFTA for the EU on 1 January 1995, the European Commission took over responsibilities for the contributions of these three countries to the Financial Mechanism 1994-1998. The donor states of the funding schemes set up after 1998 have been Iceland, Liechtenstein and Norway. (While Switzerland is a member of EFTA, the country is not part of the EEA Agreement and therefore finances bilateral funding schemes in Europe.)
Five-year funding schemes by the EEA EFTA States have been in place since 1994.
The Financial Mechanism 1994-1998, covered Greece, Ireland, Northern Ireland, Portugal and Spain. Projects were supported within the fields of environmental protection, education and training, and transport. In addition to €500 million in project support, interest rebates were granted on loans amounting to €1.5 billion in the European Investment Bank (EIB).
The Financial Instrument 1999-2003 resembled its predecessor with both beneficiary countries and the sectors covered being the same. Greece, Ireland, Northern Ireland, Portugal and Spain received €119.6 million in support. Projects were supported within the field of environmental protection, urban renewal, pollution in urban areas, protection of cultural heritage, transport, education, and academic research. About 93% of the funding was spent on projects related to environmental protection.
The EEA Grants and the Norway Grants 2004-09 were established in connection with the enlargement of the European Union in 2004. Ten new member states joined not only the EU, but also the European Economic Area (EEA). The accession of Bulgaria and Romania to the European Union led to an additional enlargement of the EEA and of the EEA and Norway Grants in 2007.
The enlargements required a substantial increase in the contributions towards European cohesion. Most of the new member states were considerably below the EU average level of social and economic development. To illustrate, the 10 states joining the EU in 2004 had 75 million inhabitants, but a joint GDP below the one of Norway and Switzerland combined with merely 12 million inhabitants. The allocation in this five-year period increased to €1.3 billion.
The EEA Grants and the Norway Grants 2009-14 provide funding to 16 beneficiary countries and the funding now amounts to €1.798 billion. To ensure a more strategic and sustainable impact, a programme approach has been introduced. All funding is now channeled through multi-annual programmes. Following its accession to the EU, Croatia agreement was reached on Croatia’s entry to the European Economic Area (EEA). This makes Croatia the 16th beneficiary country of the existing EEA and Norway Grants scheme for the period 2009-2014 (projects may be implemented until 2016/2017).