Hungary loses billions in Norway's EEA funding

The donor countries and Hungary failed to agree on how the funding for civil society was to be administered. Therefore no funding will be provided to Hungary for the implementation of programs during the current period, and Hungary loses access to the approximately NOK 2.3 billion allocated to Hungary under the EEA and Norway Grants scheme.

“I can confirm that after a long and comprehensive process, we have been unable to reach an agreement. In our view, funding under the EEA and Norway Grants scheme could have been very beneficial, particularly in providing support for civil society in Hungary, as well as in boosting innovation in the business, energy and climate sectors, and promoting minority rights,” Minister of Foreign Affairs Ine Eriksen Søreide said.

“The donor countries have set as an absolute requirement for all of the 15 beneficiary countries that the fund for civil society must be administered independently of the authorities. Hungary has accepted this but has not accepted the appointment of the best-qualified candidate for the task. Therefore, we have been unable to reach an agreement and under the conditions set out in the MoU we signed with Hungary in December 2020, no programs will be implemented in Hungary under the EEA and Norway Grants scheme during this period,” Eriksen Søreide added.

Negotiations

Negotiations with Hungary on how the roughly NOK 2.3 billion in funding set aside for Hungary was to be used began in 2016. The MoUs, which were finally signed on 21 December 2020, contain a clause stating that no programs can be approved until an independent fund operator for civil society funding has been appointed. It has not been possible to reach an agreement on a fund operator by the agreed deadline of 21 July. As a result, there will be no implementation of the planned programs.

“The fund operator for civil society funding is responsible for managing more than NOK 100 million in funding and ensures that this funding is used to strengthen civil society, promote active citizenship, and support vulnerable groups. The donor countries must make sure that the best candidate for the task is selected. We have not reached an agreement with Hungary on this point,” Eriksen Søreide explained.

The donor countries, Norway, Iceland, and Liechtenstein have been united in the process and remain committed to the principle that the best-qualified candidate must be appointed.

Facts about the EEA and Norway Grants

Under the EEA Agreement, Norway is part of the European internal market.
The Agreement sets out the common goal of working together to reduce social and economic disparities in Europe and strengthen cooperation between European countries.
The EEA and Norway Grants are a voluntary contribution on the part of the donor countries to help achieve this goal.
EUR 2.8 billion (roughly NOK 30 billion) is available under the grant scheme for the period 2014–2021, distributed among 15 beneficiary states.
Norway provides over 95% of this funding; the remainder is provided by Iceland and Liechtenstein. An allocation of roughly NOK 2.3 billion was set aside for Hungary for the current period.
The EEA and Norway Grant schemes provide funding for various programs in a number of sectors. It is mandatory for each country to have a fund for civil society.
Disbursement of all EEA and Norway Grants funding to Hungary has been stopped due to disagreement about who is to administer the fund for civil society.
In each beneficiary country, a fund operator for civil society funding is appointed on the basis of an open call for proposals and an assessment and ranking of the candidates according to the following criteria: