Home » European Economic Area (EEA)

European Economic Area (EEA)

« Back to Glossary Index

The European Economic Area, abbreviated as EEA, consists of the Member States of the European Union (EU) and three countries of the European Free Trade Association (EFTA).

The Agreement on the EEA entered into force on 1 January 1994.

It seeks to strengthen trade and economic relations between the contracting parties and is principally concerned with the four fundamental pillars of the internal market, which are the free movement of goods, people, services, and capital.

Countries that belong to the EEA include Austria, Belgium, Bulgaria, Croatia, the Republic of Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, and Sweden.

EEA Members

The European Economic Area (EEA)

The EEA includes EU countries and also Iceland, Liechtenstein, and Norway. It allows them to be part of the EU’s single market.

Switzerland, previously participating, was neither an EU nor EEA member but was part of the single market so Swiss nationals had the same rights to live and work in EEA countries as other EEA nationals.

However, Switzerland no longer participates in the European Economic Area. Now, Croatia has applied to participate.

What the EEA Does: Member Benefits

The European Economic Area is a free trade zone between the European Union and the European Free Trade Association (EFTA). Trade agreement details stipulated by the EEA include liberties on the product, person, service, and money movement between countries.

In 1992, member states of the EFTA (except Switzerland) and members of the EU entered into this agreement and by doing so expanded the European internal market to Iceland, Liechtenstein, and Norway.

Today, the European Economic Area hands its organization to several divisions, including legislative, executive, judicial, and consultation, all of which include representatives from several member states of the EEA.

What the EEA Means for Citizens

Citizens of member countries in the European Economic Area can enjoy certain privileges not afforded to non-EEA countries.

According to the EFTA website:

“The free movement of persons is one of the core rights guaranteed in the European Economic Area (EEA). It is perhaps the most important right for individuals, as it gives citizens of the 31 EEA countries the opportunity to live, work, establish a business, and study in any of these countries.”

Essentially, citizens of any member country are allowed to travel freely to other member countries, whether for short-term visits or permanent relocations.

However, these residents still retain their citizenship to their country of origin and cannot apply for citizenship of their new residence.

Additionally, EEA regulations also govern professional qualifications and social security coordination to support this free movement of people between member countries.

As both are necessary to maintaining individual countries’ economies and governments, these regulations are fundamental to effectively allow for the free movement of people.

The Difference Between EEA and EU

The European Economic Area (EEA) Agreement and the European Union (EU) are not the same things.

The EEA agreement is related to the single market and the laws relevant to it, while the EU is both economic and political.

All regulation that EEA countries have to comply with is formed by the EU, which effectively means that the EEA/EFTA countries do not have a say in forming the laws they are required to implement.

The EEA countries also have to make financial contributions to the EU, though smaller than the contributions of an EU member.

Trade on the Go. Anywhere, Anytime

One of the world's largest forex brokers is ready for you. Enjoy competitive fees and dedicated customer support while trading securely. You'll also have access to their tools that make it easier than ever to view your trade history, copy trades, manage investments from other traders, view price charts, and make conversions with zero fees. Make an account for free and join millions of traders and investors on the global forex market.