Hungary and Norway agree to resume aid payments

Hungary and Norway agree to resume aid payments
By bne IntelliNews December 10, 2015

Oslo has agreed to resume payments to Hungary under the Norway Grants scheme following a high profile spat that halted the funds for over 18 months an official in Budapest claimed on December 10. Norwegian officials claim Hungary has backed down and given in to a raft of demands in order to turn the tap back on again.

The parliamentary state secretary at the prime minister’s office, Nandor Csepreghy, said Hungary plans to make an official announcement on December 11, MTI reports.

Norway suspended the aid in May 2014, citing dissatisfaction with Budapest's decision to move the management of the scheme out of the central government administration to a state-owned company, which it said was a violation of the agreed rules.

The Norway Grants are made under an agreement between the EU and Norway, Iceland and Lichtenstein and offer a €1.8bn package to fund projects in developing European economies. However, Budapest complained that the disbursement of the funds was skewed, and that the Hungarian NGOs that received the financing under the scheme were known critics of the Fidesz government.

Budapest accused Oslo of trying to influence domestic politics through the grants. Shortly after the suspension of the funds, government agencies raided the offices of the NGOs that helped distribute the Norwegian grants, launched a controversial investigation into the main disburser of the funds - Okotars - and 17 other foundations.

Government control office Kehi revealed later in 2014 that it had uncovered irregularities in 61 out of 63 projects that had received funding from the grants, and said it was ready to submit a criminal report on Okotars on suspicion of mismanagement, budget fraud and unauthorised financial activity. Tax authority NAV, however, closed the investigation in October “due to lack of evidence of a crime”.

Csepreghy said the government still believes that there are irregularities in the way certain civil organisations receive funding from the grants. However, Norway claims Hungary backed down and accepted a raft of demands in order to get the funds flowing again.

Oslo officials told Politico that Budapest has agreed to end to all investigations into work being done in Hungary by NGOs supported by Norway. In return, Norway has agreed to release development funds Norway’s minister of European affairs, Vidar Helgesen, announced to the Norwegian parliament on December 10.