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Hungary Loses EUR 215 Million Norway Grants After No Agreement Reached

Péter Cseresnyés 2021.08.05.

While the Orbán administration had previously stated that there was a chance to reach a consensus on the utilization of funds from the Norway Grants, now the Norwegian Foreign Ministry has confirmed that “Hungary is no longer eligible” for the money. As a result, Hungary has become the only EU country that won’t receive EUR 215 million in development funding. Meanwhile, the Orbán administration promised to take legal action, claiming that with this decision Norway is violating its commitments to Hungary.

The 215 million euros (HUF 77 billion) of financial aid is not being delayed, not temporarily in jeopardy, but has been permanently lost, Norway’s Foreign Ministry confirmed to Népszava when the paper asked whether there is still a chance for the 2014-2021 Norway Grants to be disbursed to Hungary.

No Deal Reached on Norway Grants Worth EUR 215 Million
No Deal Reached on Norway Grants Worth EUR 215 Million

The Norwegian Foreign Minister blames the Hungarian government for refusing to agree on the most relevant bidder, but the Orbán administration insists that Norway owes this money and that they are still open to negotiation.Continue reading

This means that Hungary has now permanently lost access to some HUF 77 billion forints in funding, despite the Prime Minister’s Office telling the paper just a week ago that the Hungarian side had proposed a new deadline for negotiations to resume.

Fact

As the European Economic Area countries (Norway, Iceland, and Liechtenstein)  are not members of the EU, the EEA and Norway Grants funding is part of the price the three states pay to gain full market access to the European Union. The EUR 215 million would have been used for social inclusion, health, education, transport and local development, and Roma integration through the support of civil society.

The Norway Grants, or rather their distribution, became the center of domestic and diplomatic debates after the 2014 parliamentary elections. Hungarian authorities raided the office of the Ökotárs Foundation (and those of certain recipient NGOs) responsible for the distribution of funds.

The Orbán administration said the grant had been used for political purposes (alleging links with opposition green-centrist party LMP), and additionally accused Ökotárs of unauthorized financial activities and lack of transparency.

On the other hand, many viewed the government’s action as an attack on the civil sphere, as the grant money supported NGOs involved with issues like human rights, equal opportunity, youth and children’s issues, the environment, and minority and vulnerable groups.

The debate soon led to diplomatic tensions, even though Norway and the other countries consistently denied political activities, and auditing also didn’t find any kind of wrongdoing or illegal activity. For some time, payments were also suspended by the donor countries and the government came under criticism from, for example, the Council of Europe and the OSCE.

The dispute soon shifted to who should be in charge of allocating the money: Norway insisted on a body independent from the government, while the Orbán administration wanted to have control over it, blaming the Norwegian government’s “insistence on supporting the civil organizations of George Soros.”

Eventually, after a lengthy negotiation period, the Hungarian side agreed to launch the third cycle of the program in December last year.

After Long Debates, Agreement Reached on EEA and Norway Grants for Hungary
After Long Debates, Agreement Reached on EEA and Norway Grants for Hungary

More than 214 million euros in European Economic Area (EEA) and Norway Grants will be made available to Hungary under agreements signed with the representatives of donor countries Norway, Iceland, and Lichtenstein on Monday, the Ministry of Innovation and Technology (ITM) announced. The Grants, a part of which is due for civil society, had been […]Continue reading

However, Norway added an important clause to the agreement which stipulates that grants to NGOs must be decided by an independent fund manager, and that reaching an agreement on this is a precondition for the distribution of the money.

But in these past seven months, the Orbán government did not find a compromise with Norway, e.g. to name an NGO that the Northern European country would have accepted.

Thus, Hungary has become the only country in the EU that won’t be receiving the EUR 215 million in development funding.

Hungary to take legal action

The Orbán administration promised to take legal action over the seizure of talks with the Norway Grants on the distribution of funds in Hungary.

Under the agreement between the two countries, the body distributing the funds should be appointed in a consensus between the two countries, the Prime Minister’s office emphasized in a statement on Wednesday.

Hungary “was ready to accept any of the seven applicants except for Ökotárs, a Soros organization,” the ministry said. Norway “insisted on” Ökotárs, excluding internationally acclaimed applicants such as the Hungarian Red Cross.

Norway is violating its commitments as a member of the European Economic Area, the ministry said. “Hungary stated that Norway is indebted to Hungary for 77 billion forints [EUR 215m] in exchange for access to its markets,” according to the statement.

Featured photo by Zoltán Fischer/PM’s Press Office/MTI