Norway to resume transfers to Hungary

December 10, 2015


During a Q&A session at an event hosted by Transparency International on the occasion of World Anti-Corruption Day, undersecretary and deputy minister Nándor Csepreghy announced that the Hungarian government has reached an agreement with the Norwegian government to lift the suspension of Norway Grants to Hungary.

In April 2014 Norway formally suspended remittance of Norwegian and European Economic Area (EEA) development grants to Hungary when the latter failed to address concerns arising from its decision to wind up the National Development Office (NFÜ), the agency tasked by international agreement with overseeing the use of EUR 153.3 million of Norwegian and EEA development grants in Hungary.   Norway argued that doing away with the “National Focal Point” constituted a unilateral modification to the relevant agreements.

Before winding up NFÜ at the end of 2013, it was personally overseen for six months by János Lázár, Minister Overseeing the Office of the Prime Minister.  The decision to wind it up and reassign tasks and personnel to other ministries took donor countries by surprise.  In January 2014 Norway reportedly informally notified the government that it was suspending the remittance of development funds until such time the government of Hungary addressed concerns arising from this unilateral modification to international agreements.  When cooperation was not forthcoming on Hungary’s part, Norway formally suspended the development funds in April 2014.

Strong-arm tactics

The Orbán government responded by changing the subject and going on the attack.  Lázár publicly accused Norway of trying to influence Hungary’s domestic affairs by providing civil funds to NGOs close to liberal party Politics Can Be Different (LMP).   He called on Norway to suspend Norwegian and EEA civil funds pending a “comprehensive agreement” that involved both the civil and development funds.  In other words, the Hungarian Office of the Prime Minister threatened to starve scores of NGOs of funding as a way of pressuring Norway into lifting the suspension of development funds.

When Norway refused to budge, Lázár and Csepreghy ratcheted up matters by calling for a government audit of NGOs receiving Norwegian and EEA civil funds, as well as an audit of the Ökotárs-led consortium of four NGOs responsible for administering Norwegian and EEA civil funds in Hungary.

In the government-sponsored public relations war on civil society that ensued, Ökotárs and other Norwegian and EEA civil grant recipients were branded as “foreign agents”.  Ökotárs responded by accusing the government of harassment.

The investigations culminated in a police raid of Ökotárs’ offices and the suspension of its tax identification number.

Norway strongly protested the government’s actions, claiming they breached international agreements.  The ombudsman’s office agreed, stating that government auditors had no right to audit an NGO that received no public funding from the Hungarian government.

In November 2014, Norway declined government invitations to send representatives to Budapest to review the report prepared by government auditors–a report and other media outlets report contained conclusions not supported by the main body of the report.

Once prosecutors had launched a criminal investigation into Ökotárs and other NGOs, the oil-rich Scandinavian country took a “wait and see” attitude, during which time it continued to distribute civil grants to NGOs but refused to remit development grants to the government of Hungary.

Norway’s patience appears to have paid off.  Earlier this year all charges against Ökotárs and other NGOs were dropped, with Budapest prosecutors citing lack of evidence of wrongdoing.

Has Hungary caved?

It remains to be seen whether the Prime Minister’s Office has finally conceded to the demands of the Norwegian government regarding the distribution of Norway Grants in Hungary. Lázár will likely announce news of the agreement at today’s weekly marathon press conference.

What is certain is that Hungary’s decision to fight this battle with Norway deprived it of EUR 40-50 million in development grants and did immeasurable harm to the professional reputations of János Lázár and Nándor Csepreghy, and Hungary’s international reputation as a whole.