Move to free Norway funds called insufficient

History

The Hungarian government met some of the demands necessary to receive the Norway funds, but not all of them.

"The position of the donors has not changed. Negotiations concerning the continuation of the nine programmes and the lifting of the suspension can only start once the Hungarian government has addressed all outstanding issues," the Norwegian embassy told BBJ today.

On Friday the Hungarian government announced it would transfer the administration of nine EEA and Norway Fund-supported programmes from the state-owned Széchenyi Program Office to the Prime Minister's Office by the end of August.

This is what Norway had been asking for months, as a pre-condition for Hungary to continue benefitting from the EEA and Norway grants. Hungary is a relatively large recipient of the EEA Grants, which are jointly financed by Iceland, Liechtenstein and Norway.

For the current period (2009-2014), €153.3 million has been allocated to Hungary, of which €11.76 million has already been disbursed.

However payments were suspended on May 9, 2014, because the Hungarian government had moved the management and monitoring of the funds outside the central administration. This was considered by Norway - the main donor - as a breach of agreement. According to a Memorandum of understanding signed with Hungary – the same scheme applies to all 16 beneficiary states - funds have to be implemented and monitored by the country’s central administration, not by a small office offering less guarantee for transparency.

Now that the Hungarian PM’s office is again managing the funds, will the Norwegians lift the suspension of the funds?

Not yet. There is another big condition to be fulfilled: the audit of more than 50 NGO’s by the Hungarian Government Control Office (KEHI) "should be cancelled immediately. Audit of the Hungarian NGO programme is the responsibility of the FMO (the donors’ secretary in Brussels)," says the EEA/Norway grants secretariat on its website.

These NGOs receiving Norway grants have not been affected by the suspension of the funds. They have been described by Prime Minister Viktor Orban as "political paid activists" financed from abroad to obstruct national development.

But until the investigation of these NGOs stops, Norway says it will withhold the funds.

The article was written by Florence La Bruyère

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