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Norway Suspends Grants to Hungary After Governments Clash

May 9 (Bloomberg) -- Norway suspended grants to Hungary after clashing with Prime Minister Viktor Orban’s government over the way the funds are disbursed.

Norway, which has pledged the bulk of 153 million euros ($211 million) in grants to Hungary for programs ranging from green industry innovation to helping at-risk youth, cited Hungary’s move to shift the monitoring and implementation of the funds to a state-owned company from the government, according to a statement from the Oslo-based Foreign Ministry.

“Hungary’s actions in this matter are unacceptable,” European Union Affairs Minister Vidar Helgesen said in the statement. “Unfortunately, the Hungarian government has shown little willingness to find solutions that comply with the agreements Hungary has entered into.”

Orban’s government, which won re-election last month after a tenure marked by an unprecedented consolidation of power, this week asked Norway to suspend 13.5 million euros in grants to non-governmental organizations unless it was willing to spend them through the government.

If Norway is “adamant” about having the Hungarian Prime Minister’s Office disburse grants, instead of a state-owned, non-profit organization, then the Budapest-based government is ready to consider this, Nandor Csepreghy, deputy state secretary for the distribution of EU funds, said by phone today.

“At the same time, Hungary’s government wants to be the one disbursing all public funds,” Csepreghy said. “We can discuss both issues now simultaneously.”

Hungary is already facing scrutiny over the disbursement of EU funding, which accounts for more than 95 percent of all infrastructure-development financing.

The EU executive wants the country to address concerns after the overhaul of the system by which funds are disbursed, MTI state news service reported on April 28, citing Shirin Wheeler, spokesperson for EU Regional Policy Commissioner Johannes Hahn.

To contact the reporter on this story: Zoltan Simon in Budapest at zsimon@bloomberg.net

To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net Jonas Bergman

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