Hungary loses Norwegian funds as rule-of-law concerns intensify
Hungary was unable to reach a deal with Norway, Iceland and Liechtenstein over how grants would be disbursed.
Hungary formally lost access this week to over €200 million in grants from Norway, Iceland and Liechtenstein amid growing concerns about the country’s democratic backsliding.
The move came after Hungary was unable to reach a deal with the three countries — the only non-EU members of the European Economic Area — over how the funds would be disbursed. Norway, Iceland and Liechtenstein fund programs in 15 countries to help reduce social and economic disparities in Europe.
The dispute underscores a dilemma that policymakers face across Europe — how to fund programs for Hungarian citizens while ensuring those distributing the money are sufficiently independent of political pressures. And it reflects broader concerns that Budapest is eroding basic democratic norms in Hungary, creating political pressure on the EU to cut off some of its own funding to the country.
In disbursing their own grants, Norway, Iceland and Liechtenstein insist that a segment of civil society funding be administered by an entity chosen through an open call, where candidates are vetted on competence, expertise and management capacity.
But while the Hungarian government originally agreed to the selection criteria, the Norwegian government says Budapest ultimately objected to the chosen candidate.
“When the government cannot agree on the basic principle that we agree with all other 14 beneficiary countries about, then we have to draw the line,” said Norwegian Foreign Minister Ine Marie Eriksen Søreide, whose country provides 95 percent of the funds.
“It would be unthinkable for us to make it any easier for Hungary to surpass these very strict rules and regulations,” the minister told POLITICO in an interview on Friday.
Speaking to reporters in Budapest on Thursday, Hungarian Prime Minister Viktor Orbán’s chief of staff, Gergely Gulyás, acknowledged that no agreement had been reached.
“Norway owes us this money,” he said.
Søreide, a member of Norway’s Conservative Party, said the funding is a voluntary contribution — lamenting the loss of funds for Hungarian civil society groups.
“They need money because they have very few other sources of income right now, so we will have to try to look for other ways to support them — even though it’s increasingly difficult, precisely in Hungary, because it’s … tightening the grip around civil society,” the minister said.
Oslo has in recent years repeatedly clashed with Budapest over civil society funding. In 2014, it accused the Hungarian government of using an audit and police raid to harass an organization tasked with distributing Norwegian grants to Hungarian NGOs. Norway also temporarily suspended funding for Hungary that year, and has been in negotiations with Budapest since 2016 on funding for the 2014-2021 period.
Søreide said that Norway — which also cut funding to Polish municipalities that declared themselves “LGBTQ-free zones” — also has concerns about new anti-LGBTQ measures in Hungary.
Recent developments in the country “worry me a lot,” the minister said, citing “crackdowns on everything from civil society to basic human rights.” She noted Norway has been “very vocal” about a recent Hungarian bill, which has been criticized for conflating pedophilia with homosexuality.
The European Commission last week launched infringement proceedings over the legal changes in Hungary, which Budapest insists were designed to protect children and parents’ rights.
Norway’s concerns about Hungary’s government, the minister said, are “getting deeper month by month.”