IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
← back to the state act
Inception date: 22 Feb 2009 | Removal date: 23 Dec 2011
Still in force

Financial grant

On 12 February 2009, Hungary notified a temporary aid scheme for granting limited amounts of compatible aid. State aid N 77/2009
 
The scheme is explicitly based on Article 87(3)(b) EC Treaty, and relies on section 4.2.2 of the Commission communication "Temporary Community framework for State aid measures to support access to finance in the current financial and economic crisis."
 
The aid will be provided in the form of transparent forms of aid and in particular, in the form of direct grants, reimbursable grants, soft loans, interest rate subsidies, tax advantages, reduction of social security contributions, provision of risk capital, equity intervention, debt write-off and public guarantees.
 
The scheme applies to SMEs and large firms. Hungary estimates the number of beneficiaries to exceed 1000 firms.
 
The Commission found that the notified measure constitutes state aid within the meaning of Article 87 (1) of the EC Treaty.
 
"State resources are involved in the notified scheme since the aid is granted from national, regional and local state resources, via the respective aid granting authorities at national, regional, or local level. The measure is selective since it will be granted only to certain firms. The measure conveys an advantage by making available limited amounts of aid which would not be available to the beneficiaries without the measure. The measure affects trade between Member States since the scheme is not limited to beneficiaries which are active in sectors where no intra-community trade exists. The measure distorts or threatens to distort competition." (par. 21-25 of the letter from the EC to Hungary- Brussels, 24.2.2009 C(2009) 1372).
 
Article 87(3)(b) of the EC Treaty enables the Commission to declare aid compatible with the Common Market if it is "to remedy a serious disturbance in the economy of a Member State." This aid has to be applied restrictively and must tackle a disturbance in the entire economy of the Member State according to the interpretation of the Article 87(3)(b) by the Court of First Instance.
 
The Commission referred to its Communication on the financial crisis (Temporary Framework) and concluded that the Measure complies with the conditions laid therein. Therefore, despite the measure constituting State aid pursuant to the Article 87(1) EC, it is compatible with the Common Market according to the Article 87(3)(b) EC Treaty. The Commission raises no objections against the measure at issue and authorizes it as emergency intervention in the face of the current financial crisis. (par. 27-30 of the letter).
 
Prolongation of "Temporary aid scheme for granting limited amounts of compatible aid" - State aid SA.32040 (2010/N)
 
On 7 December 2010 the Hungarian authorities notified a prolongation of the above mentioned scheme pursuant to the Commission Communication "Temporary Union framework for State aid measures to support access to finance in the current economic and financial crisis" of 1 December 2010. The aid granted under the prolonged scheme is not granted later than
31 December 2011.
 
The Commission considered that the notified prolongation until 31 December 2011 of the Hungarian scheme "Temporary aid scheme for granting limited amounts of compatible aid" is in conformity with the requirements set out above and considered it to be compatible with the internal market on the basis of Article 107(3)(b) of the TFEU. (par. 22 of the letterfrom the EC to Hungary - Brussels, 20.12.2010 C(2010)9504 final.)

 
 
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.
 

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