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Norway suspends €220 million in aid to Hungary over lack of transparency

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Budapest, Hungary – Norway has decided to suspend financial aid worth hundreds of millions of euros to Hungary’s NGO sector after the two countries failed to reach an agreement on how the funds should be distributed.

In a statement published on Friday, Norway’s Ministry of Foreign Affairs said that “the donour countries and Hungary failed to agree on how the funding for civil society was to be administrated”.

Hungary loses out on €220 million in aid from Norway

Under the original agreement, Hungary was set to receive 2.3 billion Norwegian kroner (around €220 million) from the European Economic Area (EEA) and Norway Grants Scheme, in a scheme through which Norway – and to a lesser extent Iceland and Liechtenstein – support programs in lesser developed EU countries to support civil society and reduce social and economic disparities, in exchange for their participation in the EU’s internal market.

Apart from Hungary, 14 other countries are among the beneficiaries of the EEA and Norway Grants for the 2014-2021 period. “I can confirm that after a long and comprehensive process, we have been unable to reach agreement,” stated Norwegian Foreign Affairs Minister Ine Eriksen Soreide.

“Funding under the EEA and Norway Grants scheme could have been very beneficial, particularly in providing support for civil society in Hungary, as well as in boosting innovation in the business, energy and climate sectors, and promoting minority rights,” she added.

Hungary’s failure to provide guarantees the funds would be administered independently from authorities, and the government’s rejection of the “best-qualified candidate for the task”, are responsible for the fallout, officials in Oslo said.

“Norway owes us this money,” claimed Gergely Gulyas from Prime Minister Viktor Orban’s office on Thursday. “Because Norway, without being a member of the European Union, participates in the common market, enjoys its benefits [but] does not have to face other excellent rules of the EU and does not have to bear other burdens, such as paying into the EU budget.”

“Disturbing authoritarian trend”

Orban’s Hungary has faced heavy criticism from the EU, European partners and rights organisations for restricting the rights of sexual minorities and LGBT people, undermining judicial independence and cracking down on civil society organisations, including media outlets and NGOs.

Norway has long been one of the most vocal critics of the Hungarian government’s treatment of NGOs and other dissident voices.

In 2014, the Hungarian government accused Oslo of using the aid to fund the country’s opposition and “interfere in Hungarian politics”. Norwegian authorities dismissed the allegations, saying they would continue to support Hungary’s civil society and NGOs despite the “deeply disturbing authoritarian trend” in the country.

“There is a shared European concern about the weakening of democratic institutions and processes [in Hungary], such as the constitutional court, the legal system, the electoral commission and of course the space for the media and others to enjoy the freedom of expression,” said Norway’s then Minister for European Affairs Vidar Helgesen.

Responding to Hungary and Poland’s efforts in 2017 to waive the requirement that funds should be allocated through an independent body, Norwegian Prime Minister Erna Solberg warned that “the civic sector shouldn’t be controlled by the state” and said that “we cannot allow Poland and Hungary to control the money to civil society.”

The biggest beneficiary, Poland is set to receive more than €800 million from the grants.

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