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21st May 2022

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Norway to renew regional aid for EU newcomers

Non-EU members Norway, Iceland and Liechtenstein are set to renew a five-year funding scheme of over €1 billion for energy, social and democracy projects in the bloc's poorest member states.

"We have made good progress and we hope to finalize the negotiations before the summer break," Rune Bjastad, spokesman for the Norwegian mission to the EU told this website.

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Norway is the leading negotiator with the European Commission, with Oslo funding 97 percent of the current €1.3 billion allocated to EU's 12 most recent members, as well as Greece, Portugal and Spain.

In parallel to the renewal of the funding scheme, which ended in April, Oslo is also negotiating bigger export quotas for its fish products onto the EU market.

"We've had a tough but constructive dialogue with the commission on several matters, and we hope to see a conclusion very soon," Mr Bjastad added.

The funding is likely to increase, but the exact amount is still being negotiated. A commission spokeswoman declined to comment until the ongoing negotiations were finalised.

Norway had attempted to remove Greece and Spain from the next funding scheme, and reallocate the money to the poorer newcomers. But so long as the two states are still receiving EU money for some of their poorer regions to catch up with the rest of the bloc's economies, Norway was unable to completely scrap them from the scheme.

Oslo already made a move in this direction in 2004, when it increased its contribution almost tenfold, but put half of the money in a separate fund, the co-called Norway Grants, which excluded Spain, Greece and Portugal.

Only projects from Poland, Hungary, the Czech Republic, Slovakia, Slovenia, Estonia, Latvia, Lithuania, Cyprus and Malta, and from 2007 Bulgaria and Romania, were accepted.

The "EEA Grants" worth €672 million, which include contributions from Iceland and Liechtenstein, also accept Spanish, Greek and Portuguese projects, along with the ones from the 12 new member states.

Both funds are administered by the same financial office, based in Brussels. The projects are similar to those funded under the EU's regional policy, but focus more on environment, energy efficiency, as well as democracy promotion, non-governmental organisations and implementing the requirements for the border-free area known as the Schengen zone.

Projects had to be submitted by April 2009, but reimbursements will still run until 31 December 2011.

Poland receives most

Examples of grants include a zero-emissions conference centre in Hungary, worth €523,246 and inaugurated in June 2008. It has the largest sun-fed power capacity in the country, hosting a regional NGO focusing on environmental problems in Central and Eastern Europe.

Cross-border cooperation in the broader region within the Carpathian mountains – spanning Poland, Hungary, Romania, Slovakia and Ukraine is financed with a €398,863 grant, while Portugal got €408,970 for a project aimed at saving the dolphins from the fishermen's nets.

With over half a billion, Poland is the biggest net recipient of the EEA/Norway Grants, followed by Hungary (€127.4 million), the Czech Republic (€104 million) and Romania (€91.4 million).

The three Baltic states received some €140 million altogether, while better-off Spain, Portugal and Greece got roughly €80 million for projects contracted in the last five years.

Money can be administered directly by an NGO or by an office within the national government. In the next five years, the NGO model is likely to become stronger.

Keeping an eye on the money

Norway, Iceland and Liechtenstein are keen to see their money spent correctly and have set up several cross-checking and auditing mechanisms.

"It is important for the donor states to see that their money is being spent on good projects, without suspicions of misuse of funds," Sigve Soldal Bjorstad, spokesman for the EEA/Norway Grants financial mechanism office told EUobserver.

National authorities are responsible for the follow-up and control of funds, but the office also makes random audits, as well as site visits to projects worth over 2 million euro and where risk factors appear.

If there is evidence of fraud or mismanagement of funds, the reimbursements can be stopped. So far, the three donor countries have not experienced such cases, but "with over 1,000 ongoing projects, there is more follow-up to be done," Mr Bjorstad said.

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