Skarstein: Norway willing to resume negotiations over Norwegian funds

November 6, 2014


Tove Skarstein, Ambassador to Hungary from the Kingdom of Norway, spoke on ATV’s Egyenes Beszed (Straight Talk) with Olga Kálmán last night about why Norway’s Minister for EU Affairs, Vidar Helgesen, had declined Chancellor János Lázár’s invitation to discuss the results of the Hungarian Government Control Office’s (KEHI) highly controversial investigation into the Norway Civil Fund’s grant-making contractor  Ökotárs and the consortium of NGOs responsible for distributing the funds in Hungary.

In April Norway formally notified the government of Hungary that it had suspended the payment of development funds because the government had violated the treaty defining how the funds were to be distributed and monitored. In response, the government launched an all-out assault on Norway’s NGO fund, which had not been suspended, and some 23 NGOs that had received grants from the fund.

Over Norway’s strong objections, the government launched an investigation into Ökotárs that involved police raids on the NGO’s office and the homes of some of its employees.

In late October KEHI publicly issued its findings, which were immediately criticised for arriving at conclusions not supported by the report’s own findings.  When Lázár, the Minister in charge of the Prime Minister’s Office, invited Helgesen to Budapest to review the findings, he declined, arguing that the investigation violated the treaty entered into on behalf of Hungary and Norway and because the investigation was politically motivated.

The Norwegians released the following response to the KEHI report:

  • Through agreements with the European Union and the Hungarian Government, Norway has committed itself to make available close to €150 million to Hungary to contribute to secure a stable, peaceful and prosperous Europe, based on good governance, democratic institutions, the rule of law, respect for human rights and sustainable development.
  • Due to a unilateral breach of these agreements by the Hungarian Government, the funds to Hungary were suspended in May of this year, with the exception of funds for NGOs and adaption to climate change that are not run by the Hungarian Government.
  • The KEHI-audit of the NGO-fund is in breach of agreements governing the EEA-grants. No funds from the Hungarian state budget are at stake and the donors will not accept discussions based on this report. The donors will base their evaluation of the NGO-fund on an independent audit.
  • We find the actions taken by the Hungarian government against the fund operator of the NGO-fund, Ökotars, to show a troubling lack of respect for the independence of civil society. As such, we believe the Hungarian government is challenging basic democratic values underpinning European co-operation.
  • The agreements on the EEA and Norway grants will have to be respected by Hungary, as indeed they are by the other 15 recipient countries. The suspension of the grants can only be lifted when the issues of the management of the grants is resolved and the NGO fund and its operator are allowed to function as stipulated in the agreements on the EEA and Norway grants.
  • A solution of the situation would require that the signed agreements and the agreed framework for implementation of the EEA and Norway grants are honoured and respected.
  • As soon as the Hungarian government expresses a commitment to resolve the open issues, including a satisfactory solution for the NGO fund, Norway is willing to resume discussions to find solutions within the frame of existing agreements.

What’s the real story here?

Hungary responded to the suspension of development funds by accusing Norway Civil Funds of channeling funds to opposition party Politics Can Be Different (LMP) and asking that payment of the civil funds be suspended pending a comprehensive agreement concerning all Norway funds.  When Norway refused to suspend the payment of civil funds, Hungary raised the stakes by accusing Norwegian fund manager Ökotárs of embezzlement and directing government auditors to investigate it and Norway civil fund recipient civil organizations.   In total, non-government-run programs make up less than 10% of the total development funds to be remitted to Hungary by the government of Norway.