The EEA Financial Mechanism and the Norwegian Financial Mechanism have their basis in the EEA Agreement. Under this agreement, Iceland, Liechtenstein and Norway are part of the European internal market. The agreement sets out the common goal of working together to reduce social and economic disparities in Europe and strengthening cooperation between European countries. For this purpose, the EEA Financial Mechanism and the Norwegian Financial Mechanism have been established. In total, Iceland, Liechtenstein and Norway have provided EUR 3.3 billion through consecutive grant schemes between 1994 and 2014.

In April 2014, Croatia has become a member of the European Economic Area and was given the opportunity to benefit from the EEA Financial Mechanism and the Norwegian Financial Mechanism for the period 2009 – 2014. During this period, Republic of Croatia was entitled to EUR 9,6 million.

For the period 2014-2021, EUR 2.8 billion has been set aside under the Financial Mechanisms. The EEA Financial Mechanism (EUR 1.5 billion) are jointly financed by all three donors and available in all 15 countries. The Norwegian Financial Mechanism (EUR 1.3 billion) are financed solely by Norway and available in the 13 countries that joined the EU after 2003. During this period, Republic of Croatia is entitled to EUR 103,4 million, of which EUR 56,8 million comes from the EEA Financial Mechanism and EUR 46,6 million comes from the Norwegian Financial Mechanism.