Norway Grants in Hungary

September 11, 2014

9 September 2014

Dear Madam/Sir,

The EEA and Norway Grants are the financial contribution of Norway, Iceland and Liechtenstein to support the development of certain EU Member States. Hungary has been a recipient since 2004.

In 2012, the Norway Grants appointed Ökotárs Foundation, a non-governmental organization, to manage and monitor the distribution of a part of its funding. Recently it was discovered that, contrary to the scheme’s original, stated goals – i.e. fostering the development of civil society – Ökotárs had both directly and indirectly used the funds for party-political purposes. In addition to a Government Control Office inquiry, there is an ongoing police investigation against the Foundation on suspicion of pursuing unauthorized financial activities; this is as a result of loans having been made to other NGOs, which is an activity that requires specific authorization.

In 2012 Ökotárs Foundation was selected to manage Norway Grants funds in a procedure which effectively excluded six out of the seven applicants; no explanation was given for this. Over the past two years the Government of Hungary has expressed its concerns on several occasions regarding practices related to the Norway Grants.

The Hungarian government’s position is that Norway Grants are to be regarded as public funds and managed as such, under the agreement which allows Norway, Iceland and Liechtenstein to participate in the EU’s Internal Market in return for their contribution. Therefore, the Hungarian government has a major responsibility in ensuring that beneficiaries use these funds in a transparent way and according to the goals laid down in law.
The Hungarian government believes that financial assets provided for strengthening civil society must be strictly separated from the financing of political parties and that community funds should not be used to finance party-political activities.

The Hungarian government has repeatedly asked the Norwegian party to launch a joint inquiry concerning the disputed fund distribution. This request was turned down by the Norwegian Government.

Therefore, to ensure maintenance of the rule of law, the Hungarian government has acted within its remit to commission a general and comprehensive inquiry involving independent actors. The Norwegian government was offered the opportunity to join this investigation, but declined to give an official reaction to the proposal.

Unfortunately, Ökotárs Foundation has not cooperated fully with the Hungarian authorities. The Hungarian government’s position is that no NGO is exempt from the principle of transparency and regular, orderly reporting.

As it is in our common interest, the Hungarian government looks forward to arriving at a prompt conclusion and the settlement of issues which have led to this dispute with its Norwegian partners. Minister János Lázár announced that, if necessary, Hungary will turn to the European Commission to mediate in the dispute.

Kind regards,

International Communications Office