Norway and its two partners in the European Economic Area (EEA), Iceland and Liechtenstein, have been unable to agree with the Hungarian government on how their financial aid to Hungary’s civil society should be administered. They’re thus blocking access to all their potential funding, amounting to around NOK 2.3 billion for the period from 2014 to 2021.
“We have negotiated for several years and could not settle on terms,” Norwegian Foreign Minister Ine Eriksen Søreide told state broadcaster NRK on Friday. She also said the situation in Hungary, ruled by the authoritarian conservative Viktor Orbán, has “become worse” in recent years as his government cracks down on cultural diversity and wants to control how funding through the EEA and the Norway Grants program would be allocated.
Orbán has been widely accused of hindering freedom of the press and expression, stifling opposition, undermining Hungary’s democratic institutions and imposing restrictions on civilian society. His government has most recently been the target of strong international criticism for a new law this summer that forbids all distribution of information about sexual minorities and the LHBT community. Orbán himself has boasted that he now leads an “illiberal democracy,” instead of the liberal democracies championed by the EU.
Independent funds administrator required
Norway and its EEA partners, meanwhile, always demand that the funds they provide directly to 15 countries within the EU (to “reduce social and economic disparities in Europe”) must be administered by an operator that’s independent of each country’s government authorities and selected through a bidding process. “Hungary has accepted this, but has not accepted the appointment of the best-qualified candidate for the task,” Søreide stated in a press release issued by her ministry (external link to the ministry’s website).
“For us (Norway, Iceland and Liechtenstein, of which Norway provides 90 percent of the funds involved) it’s absoutely fundamental that civil society shall function as a corrective to the authorities,” Søreide told NRK. “It’a supposed to support vulnerable groups, minorities and others difficult situations.” The money from Norway, Iceland and Liechtenstein was also supposed to boost human rights in Hungary.
“Therefore it was important for us as donors that we shouldn’t give Hungary any special treatment,” Søreide said, and let its government have full control over the EEA’s money. “We did not want to give (the Hungarian authorities) an opportunity to choose another administrator than the one we had chosen.”
Negotiations over how the NOK 2.3 billion (USD 262 million) in aid that had been set aside for Hungary from 2014-2017 began in 2016. Søreide said around NOK 100 million of the money was to be used “to strengthen civil society, promote active citizenship and support vulnerable groups.” She noted the rest of the funding also aimed to boost innovation in Hungary’s business, energy and climate sectors. The funding itself is part of the price the three EEA countries pay to gain full market access to the European Union.
Memoranda of Understanding were finally signed last December but they contained a clause stating that no funding for any programs could begin until the independent operator for civil society funding had been appointed. An agreed deadline of July 21 was set for finding a funding administrator independent of the government. It was not met.
That effectively cuts off Hungary’s access to all NOK 2.3 billion of the funding, not just the NOK 100 million set aside for the civil society programs. Søreide stressed that a matter of principle was at stake and told NRK that she had support from several Hungarian organizations that believe the principle of independence was more important than the financial support. She’ll likely also have support from EU officials who’ve been having arguments of their own with not only Hungary but also other former communist countries now under right-wing leaders keen on consolidating power including Poland and, more recently, Slovenia.
Newspaper Aftenposten recently editorialized that it hopes the EU will assert its insistence on liberal democracies because the EU as a whole (of which Norway is not a member) is more than just an economic cooperation. “It’s a fellowship of values,” Aftenposten stated, at a time when democracy is under increasing pressure.