After years of disputes, Norway and Hungary reach an agreement on EEA funds

Norway and Hungary are laying down their arms. After years of arguing about EEA funds, an agreement is now in place.

“We agree on a letter of intent,” Norway’s Foreign Minister Ine Eriksen Søreide (H) said.

The agreement will be signed on Monday.

Hungary will now receive a significant sum of funding. 

A total of EUR 214.6 million has been set aside for aid to Hungary in the program period 2014–2021. 

That corresponds to almost NOK 2.3 billion at today’s exchange rate, and Norway bears the vast majority of this sum.

The program period expires already in April, but the payments will continue until 2024.

Independent fund operator

The big contentious issue has been the part of the funds that will go to civil society.

The three donor countries Norway, Iceland, and Liechtenstein have made an unavoidable requirement that these funds must be managed independently of the authorities. 

The same condition applies to all the 15 countries that receive EEA funding. Now an acceptable solution for all is finally in place.

“What we agree on is that if there is no agreement on who will be the fund operator, no EEA funds will be paid out,” Eriksen Søreide told news bureau NTB.

None of the EUR 214 million euros will be paid out if there is no agreement, Eriksen Søreide affirmed.

New rule of law mechanism

The negotiations in the EU on a new rule of law mechanism have been a delaying factor. The mechanism would make it possible to stop the payment of EU funds to member states that do not respect the rule of law.

The mechanism is the result of persistent concerns in Brussels that Hungary and Poland are undermining the judiciary’s independence and gagging civil society and the press.

Hungary and Poland have been deeply skeptical of the mechanism, and in the negotiations on the EU’s new long-term budget and reconstruction package this autumn, they chose to take a hard line. 

But at the EU summit earlier in December, a compromise finally came into place.

Thus, negotiations with Norway were facilitated, and now references to the new rule of law mechanism have been included in the agreement on EEA funds.

“This means that we can suspend the payment of funds if it is the case that the EU decides to use the rule of law mechanism against Hungary,” Eriksen Søreide told NTB.

“So we connect (the agreement) to that mechanism and have included references to it (the mechanism) in the agreement.”

Prolonged conflict

The conflict with Hungary has been going on since 2014 when the Hungarian authorities raided the offices of the then fund operators and took control of the civil society funds themselves.

Norway responded by freezing all support, and a fierce political dispute ensued. 

The support resumed a year and a half later.

Negotiations on the new program period have been ongoing for several years. Last year, the conflict also led to a large arms contract being put on hold. 

In this case, the Prime Minister of Hungary, Viktor Orbán, is said to have gone so far as to try to get US President Donald Trump to put pressure on Norway.

But now this problem has also been solved. On November 30, the Kongsberg Group and Raytheon Technologies announced that the contract, worth NOK 4.3 billion, had been signed. 

The two companies will supply the Nasams air defense system to Hungary.

© NTB Scanpix / #Norway Today