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Oslo awaits response from Hungary on suspended grants

Talks between Hungary and Norway on the suspension of funding from the EEA and Norway Grants scheme are not underway at present, but the country now awaits “Hungarian government to react to the letter sent on Friday in which the government in Oslo informed Hungary of the suspension of grant payments,” according to ambassador Tove Skarstein.

Skarstein was commenting in interview running in business news daily Világgazdaság this morning on a recent management switch implemented by the central government – a switch that could cost Hungary over €140 million in funding originally earmarked for the 2009-2014 budget period.

On Friday, the Norwegian Foreign Ministry officially suspended payment of €141.1 million because the Hungarian government has “moved the implementation and monitoring of the Grants scheme out of the central government administration. This is in breach of the agreements that have been entered into,” according to an official statement from the ministry.

“Hungary’s actions in this matter are unacceptable,” stated Norway’s Minister of EEA and EU Affairs Vidar Helgesen at that time. “Unfortunately, the Hungarian government has shown little willingness to find solutions that comply with the agreements entered into. We have therefore decided to suspend payments until this matter has been resolved.”

As of January 1, Hungary’s central government transferred the implementation and monitoring of EEA and Norway Grants funding from the Hungarian Environmental Partnership Foundation (Ökotárs Alapítvány) to an independent, state-owned company.

In defense of the maneuver, Prime Minister’s Office Chief of Staff János Lázár alleged in an April 24 communiqué to Helgesen that the Foundation was closely enough connected to opposition party LMP that the organization’s administration of the EEA Grants and Norway Grants represented interference in Hungarian internal affairs. Helgesen quickly rejected the allegation in response, again arguing that the arrangements were based on agreements signed by the Hungarian government.

“The monitoring and implementation tasks in connection with the programs and funds under the EEA and Norway Grants scheme must be transferred back to the central government administration in Hungary, in line with the practice used in all the other beneficiary countries,” said Helgesen, further promising that “If the Hungarian Government now shows a willingness to find a solution, there will be no major impact on the implementation of programmes and projects in Hungary.”

The EEA and Norway Grants are funded by the governments of Norway, Iceland and Liechtenstein and are devoted to reducing social and economic disparities in the European Economic Area; Norway contributes approximately 97% of the funding available via the programs. Hungary is one of the largest recipients of said funds, with €153.3 allocated to the country in the 2009-2014 period. To date, the central government has disbursed less than €12 million (or 7.8%).