Hungary: Prolongation and modification of the Hungarian bank support scheme
Description
On 15 June 2009 Hungary notified a request to prolong and modify its guarantee and recapitalization scheme ("the Original Scheme") for banks in Hungary. (State aid N 355/2009).
The Original Scheme, notified on 22 December 2008, was approved by Commission decision of 12 February 2009 in State aid case N 664/2008.
The modification relates to the subscription price of the preference shares for the recapitalization of banks. Hungary would like to delete from the decision the reference that the subscription pricewill be equal to the nominal value of the recapitalization.
For the Original Scheme the EC stated that the scheme constitutes aid to the credit institutions concerned, pursuant to Article 87(1) EC and gave the following assessment:
"The recapitalization and the guarantee to the credit institutions allow the beneficiaries to secure the required capital as well as liquidity on more advantageous conditions than would otherwise be possible in the light of the prevailing conditions in the financial markets. This gives an economic advantage to the beneficiaries and strengthens their position compared to that of their competitors in Hungary and other Member States and must therefore be regarded as distorting competition and affecting trade between Member States. The advantage is selective since it only benefits the beneficiaries of the scheme and is provided through State resources." (par. 40 of the letter from the EC to Hungary - Brussels, 12.2.2009 C(2009) 993 final).
The Commission recognized that the prolongation of the validity of the scheme until 31 December 2009 was appropriate and necessary to remedy the disturbance of the Hungarian
economy.
A state measure in the GTA database is assessed solely in terms of the extent to which its implementation affects the extent of discrimination against foreign commercial interests. On this metric, the state aid proposed here is discriminatory.
Any Evidence-Based Deliberation:
| Question | Result |
|---|---|
| Is there anything in the public record to suggest that evidence of the effectiveness of the proposed measure was considered during official deliberations? | Yes |
| Is there any evidence that alternatives to the proposed measure were considered? | |
| Is there anything in the public record that suggests that empirical evidence informed the comparison across the alternatives available to government? | |
| Was such evidence identified? | |
| Is such evidence publicly available? | |
| Did the official decision-maker in question provide an explanation as to why a chosen measure was favoured over alternatives? | |
| Is there any evidence to suggest that potentially affected trading partners were consulted before the measures were taken? | |
| Is there any evidence that safeguards have been put in place to ensure that implementation of the initiative is transparent and non-discriminatory? | |
| Did the government state its intention to review the measure within one year of implementation? | Yes |
Date Discovered:
Implemented: No
Date of inception: 18 Feb 2009
Duration: 11 months
GTA Evaluation: Red
Related Measures:
Source:
The letter from the EC to Hungury - Brussels, 03.09.2009 C(2009)6740 final. Available from < http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=... >
Government Response:
- 557 reads
