Commission approves EUR 900 mn Hungarian schemes to support companies
“The three measures, with an overall budget of around €900 million, will enable Hungary to support up to 5,000 companies of all sizes in addressing their immediate liquidity needs, alleviating their financial burden and helping them maintain jobs during and after the coronavirus outbreak," commented Executive Vice-President Margrethe Vestager, in charge of competition policy.
"We work closely with Member States to ensure that national support measures can be put in place in a coordinated and effective way, in line with EU rules," she added.
Hungary notified to the Commission under the Temporary Framework three support measures, with a total budget of around EUR 900 million, to support companies affected by the coronavirus outbreak.
Under the three schemes, the public support will take the form of (i) direct grants, (ii) guarantees on loans, and (iii) subsidised interest rates for loans, respectively.
The measures, which will be open to small and medium-sized enterprises (SMEs) and large companies facing economic difficulties and liquidity shortages due to the coronavirus outbreak. The schemes are expected to benefit up to 5,000 businesses.
The schemes aim at providing businesses which are particularly affected by the coronavirus outbreak with sufficient liquidity to cover their immediate working capital and investment needs, thus enabling them to continue their activities, make investments and maintain employment during and after the outbreak.
The Commission found that the Hungarian measures are in line with the conditions set out in the Temporary Framework. In particular:
- With respect to direct grants, (i) the support will not exceed the nominal amount of €100,000 to a company active in the primary agricultural sector, €120,000 to a company active in the fishery and aquaculture sector and €800,000 to a company active in all other sectors, and (ii) the support will not be granted to undertakings that were already in difficulty on 31 December 2019.
- With respect to guarantees on loans, the support will be implemented through three sub-measures targeted respectively at SMEs, smaller mid-caps and large companies with guarantee coverage between 80% to 90% and accordingly adjusted guarantee premiums. The guaranteed loan amounts for SMEs will be limited to €3 million, while they will be limited to € 15 million for small mid-caps.
- With respect to subsidised interest rates for loans, the credit risk margins are in line with the ones set in the Temporary Framework and will be summed with the applicable base rate for Hungary.
The Commission concluded that the Hungarian measures are necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework.
On this basis, the Commission approved the measures under EU State aid rules.
Cover photo: Getty Images Hungary