The latest scandal: The Orbán government and the Norway Fund

On May 9 we learned that Norway had suspended €140 million of aid funds to Hungary. Most Hungarians, I’d wager to say, have no idea that, in addition to funds coming from the European Union, Hungary receives aid from Norway, Iceland, and Lichtenstein. In fact, Hungary is the second largest beneficiary, after Poland, of the so-called EEA and Norwegian Grants. The money that Hungary receives is the result of an agreement that Norway, Iceland, and Lichtenstein signed in 1994, the “Agreement on the European Economic Area,” which allowed these three non-EU states to join the common market of the European Union. Joining the large EU market was financially advantageous to these countries because within the EU their products were no longer subject to tariffs. In return, the three countries agreed to extend aid to less developed countries of the Union. After 2004, a large portion of the funds went to former Soviet-bloc countries. Under the arrangement Hungary will receive €153.3 million over the next few years. A large portion of the money that has already been received was under the supervision of the Hungarian government, while a smaller amount, the Norwegian Civic Fund, was handled by an NGO called Ökotárs Alapítvány (Hungarian Environmental Partnership Foundation). This organization was chosen by a Brussels-based office to be the lead NGO in disbursing funds within Hungary.

For reasons unknown, the Orbán government unilaterally decided to change the way it handled the aid received from the EEA and Norwegian Funds. As of January 1, the office that had been in charge of the distribution of the grants closed its doors and a private non-profit organization took over its duties.  This new organization has strong ties to Századvég, a Fidesz-related think tank.

The Norwegian government considered the move a breach of  the agreement the Hungarians signed with the Norwegian government, which supplies 97% of the funds. The Norwegians did not mince words. Vidar Helgesen, minister of EEA and EU Affairs who is also the chief-of-staff of the prime minister’s office, said that “Hungary’s actions in this matter are unacceptable” and added that “the Hungarian government has shown little willingness to find solutions that comply with the agreements entered into. We have therefore decided to suspend payments until this matter has been resolved.” He insisted that “the monitoring and implementation tasks in connection with the programs and funds under the EEA and Norway Grants scheme must be transferred back to the central government administration in Hungary, in line with the practice used in all the other beneficiary countries.” Up to now there is no sign that the Hungarian government is ready to oblige.

And that is not the only issue in dispute between Norway and Hungary. The Hungarians are also unhappy about Ökotárs Alapítvány’s administration of the Norwegian Civic Fund. According to Origo, friction between the Orbán government and Norway over the Civic Fund goes back to 2012 when Tibor Navracsics complained to the Norwegian foreign minister about Ökotárs Alapítvány. He alleged that  this so-called independent organization has strong ties to LMP, the Hungarian green party, and therefore its distribution of funds favors the opposition forces.

The Hungarian government also complained about the process that selected Ökotárs as the lead NGO. Indeed, Ökotárs was the only organization that was found to be acceptable by the members of the jury, although originally there were seven applicants. Some of the groups had close ties to the government, while others were brand new creations with neither history nor reputation. Two were actually owned by the Hungarian state. The owners of two others were involved with CÖF, the government-created Civic Forum, the organization of the peace marches and sponsors of the pro-government election campaign. In any case, Navracsics’s complaint fell on deaf ears. The Norwegians were satisfied with Ökotárs.

Then, sometime after January 1, János Lázár again tried to convince the Norwegians to “renegotiate” the agreement on the basis of the new status quo. In addition, he wanted to take the Norwegian Civic Fund out of the hands of Ökotárs. The Norwegian government wasn’t impressed. So, Lázár began harassing Ökotárs Alapítvány. First, the government released nine names from the 50-60-member staff who, according to them, had had some kind of relationship with LMP, MSZP, or an anti-government university organization that was active for a short while in 2012. What they neglected to mention was that several employees had had close relations with Fidesz. Second, the government compiled a list of recipients who, in their opinion, should not have received any financial support from the Norwegian Fund, including the Roma Press Center, the Association of Liberal Youth, Women for Women against Violence, Transparency International, TASZ, the investigative journalism portal atlatszo.hu, Foundation for Democratic Youth, and two gay organizations that received small sums of money, Labris Lesbian Association and  the Rainbow Mission. Obviously, for the Orbán government, grants should go only to pro-government organizations. Critics should not get a penny as far as they are concerned.

Since neither Ökotárs Alapítvány nor the Norwegian government was intimidated, this morning the Hungarian government ratcheted up its campaign against the four NGOs that have helped Norway disburse the grants. It said that it would audit Ökotárs, the lead NGO. And today employees of the state audit department appeared at two partner organizations. At Autonómia Alapítvány, employees cooperated with the auditors but announced that they found the procedure illegal. The Hungarian State Audit Department does not have the right to investigate non-state funds, and clearly whatever small amounts of money these organizations received came from Norway. At the second organization, Demnet, the two men who showed up claimed that the investigation might take weeks. Demnet also put its objections in writing, claiming that the State Audit Department lacks jurisdiction.

Already on Friday Bernadett Szél, co-chair of LMP, wrote: “To János Lázár, the non-government sector is just another area to occupy. LMP rejects the charges.” And atlatszo.hu board member Attila Mong told Reuters that the government had set out to “cut that lifeline from the organizations it considers unfriendly, adding there were almost no other financial sources to replace these grants. Orbán’s message is clear: he wants his hands to be the only ones to feed NGOs. If you don’t want it, you will starve.”

This is where we stand now. Another unfinished chapter in the endless war of independence. Shameful, utterly shameful. Viktor Orbán and his henchmen have been systematically ruining what little remains of the reputation of Hungary.