Interview with outgoing member of the Parliamentary Committee Smári McCarthy

Published 14-12-2021
The Icelandic ex-parliamentarian Smári McCarthy was a member of the EFTA Parliamentary Committee for five years, one of these as chair. He did not seek re-election in this year's Icelandic election.

The Icelandic parliamentarian Smári McCarthy has become a familiar face on the EEA Parliamentary Committee over recent years. Since McCarthy did not seek re-election in this year´s Icelandic election, we asked McCarthy some questions about his time in the committee and about the EEA in general.

How many years did you serve as a member of the PC, and for how many as chair?

I was in the Icelandic delegation to the EFTA Parliamentary Committee (PC) for five years, of which I served as delegation chair for four years, and EFTA PC chair for one year.

Why is the EEA important and what does the EEA Agreement mean for Iceland?

The EEA is possibly the most important international agreement for Iceland because it takes us from being a small far-away island in the North Atlantic and makes us part of a significant common market with hundreds of millions of other people. At the same time also making our legal framework compatible with the rest of Europe in a way that makes it easy for anybody in the world to understand what doing business in Iceland is like.

This directly improves our wellbeing in Iceland, giving us significantly expanded access to different products, better consumer protection, and helps us do more global trade. This in turn makes our overall status in the world more important, allowing us to do much more globally on everything from cultural cooperation to human rights.

The EEA Agreement is a solid economic foundation. Not just for Iceland, but for all three of the EFTA EEA countries.

How has the work on the EEA Agreement changed throughout your years working with it and EFTA?

While the EEA Agreement is incredibly important, it isn't without flaws and problems. One thing in particular that has stood out over the last few years is that with greater integration in the EU there is a stronger tendency to shift to EU-specific regulatory agencies with specific powers. This makes sense for the EU, because it simplifies a lot of processes that incurred large overheads in the past, for instance on energy regulation.

However, these mechanisms don't mesh perfectly with the EEA two-pillar system, and so a lot of what's been happening over the last few years has been trying to strike a balance.

The biggest issue is that the EU institutions are naturally primarily focused on the functioning of the EU, and the EEA often becomes an afterthought. This has meant an increased emphasis on representing the EFTA EEA States' interests towards the EU.

What do you remember best from those years of work?

While there were many great themes in the work with the EFTA PC and the EEA Joint Parliamentary Committee (JPC), I think the fact that my tenure there overlapped with the entire Brexit fiasco is most memorable. I had been quite critical of Brexit beforehand, but it was fascinating to have front-row seats to the story as it unfolded, by way of meetings with key players on both sides of the negotiations as the EFTA EEA States were trying to figure out their own solution. It was a deep lesson in both how to do politics well, and how to do politics extraordinarily poorly.

At the end of the day, I'm glad the outcome hasn't been as catastrophic for anybody as it looked like it might be for a good while, but the long-term effects are still becoming clear ─ and to me it's as clear as ever that the way to increase people's prosperity is through more economic and social collaboration, not less.

How important is EFTA for its Member States?

Historically, EFTA was one of two competing frameworks for European integration, alongside the European Coal and Steel Community (ECSC), which later morphed into the EU. These frameworks weren't set up in conflict with each other. They just represented different and equally legitimate approaches to the same goal. Today, EFTA is smaller than it was in the past, because the EU has turned out to be a stronger framework for the kinds of things European countries are trying to accomplish, but that doesn't reduce EFTA's importance at all.  It is still a strong, if small alliance of countries with strong, open economies, and EFTA has built one of the most powerful free trade networks on the planet.

To analyse the importance of something, you have to consider what happens if it goes away: if EFTA stopped existing, where would Iceland, Switzerland, Liechtenstein and Norway be? The damage would be significant, and it would take years or decades to recover. And while perhaps for some countries EU accession might be a viable alternative, that conversation is not trivial and we shouldn't trivialise the complexity at play.

Suffice to say that EFTA's importance is as great as ever, and while it's hard to predict what the future might hold for EFTA, in the medium term it will certainly continue to be one of the world's most powerful regional free trade associations.

How do you view the future of the EEA?

Firstly, with the aforementioned issues with the way the EU is changing, it may become increasingly complicated to maintain the EEA without some changes to the institutional framework.

Secondly, some countries are (finally!) shifting away from the legacy of neoclassical economics towards more reality-based systems of thought. This has the effect of making the article 3 rules seem somewhat antiquated. And third, I do believe that there is going to be a greater call from the public in the EFTA EEA States over the coming years for involvement and representation in the decision-making processes in Brussels.

This is all to say that while I think the EEA is massively important at present, now that it is almost 30 years old it is starting to show its age and will eventually have to be reconsidered and modernised. And while that is a complicated conversation to have with the EU, especially immediately after Brexit and with a lot of the regional complexities that exist in the EU's periphery at the moment, it's a conversation that might have to start sooner rather than later, if political courage can be found to do so.

I don't necessarily expect the EEA to go away ─ and I certainly hope that if it does, it is replaced by something that looks to more economic and social collaboration, not less. But whatever does happen, I feel a need to caution against complacency. As a wise ambassador once put it, "the avalanche has already started. It is too late for the pebbles to vote."

 

 
 
Two outgoing Chairs: Smári McCarthy and Svein Roald Hansen, during the EEA JPC in Reykjavík, August 2021.
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