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: 23 Feb 2009 | Removal date: 23 Jan 2012
Still in force

State loan

On 12 February 2009, Hungary notified the Temporary aid scheme for granting aid in the form of loans with subsidised interest rate. State aid # 78/2009
 
The scheme is expressly based on Article 87(3)(b) ECT, as interpreted by Paragraph 4.4.2 of the Commission communication "Temporary framework for State aid measures to support access to finance in the current financial and economic crisis."
 
The aid is provided in the form of subsidized public loans. The scheme applies to the whole territory of Hungary, and is open to all sectors of the economy. The potential beneficiaries of the scheme are SMEs and large enterprises. The Hungarian authorities estimate that the total number of beneficiaries will exceed 1000.
 
The Commission considers that the notified measure constitutes State aid within the meaning of Article 87 (1) of the EC Treaty and gave the following assessment:
 
" State resources are involved in the notified scheme since the subsidized loans are made available from State resources. The measure is selective since it will be granted only to a limited number of firms located in Hungary. The measure confers an advantage by relieving the beneficiaries of costs which they would have to bear under normal market conditions since, without the intervention by the State, the borrowers would obtain loans only at higher costs, if at all. 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." (par. 22-25 of the letter from the EC to Hungary - Brussels, 24.2.2009 C(2009) 1371)
 
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 - 32of the letter).
 
Prolongation of the "Temporary aid scheme for granting aid in the form of loans with subsidised interest rate" - State Aid SA.32215 (2011/N)
 
On 6 January 2011, Hungary notified the prolongation of the existing aid scheme until 31 December 2011. The measure may cover loans of any duration. The reduced interest rates (see original measure) may be applied for interest payments until December 2013. The Commission did not raise objections.
 
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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