ANNOUNCED AS TEMPORARYNo
Bailout (capital injection or equity participation)
On 23 September 2009the Hungarian authorities formally notified the liquidity scheme on 9 November 2009 under Article 107(3)(b) TFEU.
In response to the ongoing exceptional turbulence on the financial markets, Hungary enacted a law which provides for liquidity in the form of loans to financial institutions. The scheme is open to all credit institutions established in Hungary, including subsidiaries of foreign banks, but excluding banks operating in the form of branch offices.
The liquidity support takes the form of loans. The loans are granted on the basis of the Act, which empowers the Finance Minister to conclude the loan agreements and set out the conditions in the agreement. The loans granted under the scheme should be issued within a period of six months.
The Commission concluded that the measure contains state aid and gave the following assessment:
"The loans are granted by public authorities, i.e. from State resources, give an economic advantage to the banks and strengthen the position of these beneficiaries compared to that of competitors in other Member States. The scheme must therefore be regarded as distorting competition and affecting trade between Member States. In particular, the Commission is of the opinion that under the circumstances of the financial crisis no private investor would have granted loans of such amounts and on such terms to the participating financial institutions, in particular at the time they were granted. On the basis of the above, as the measure involves public financing, is directed at certain beneficiaries engaged in an economic activity affecting trade between Member States and distorts or threatens to distort competition inside the internal market it is to be considered State aid within the meaning of Article 107(1) TFEU." (par. 32-34 of the letter from the European Commission to Hungary - Brussels, 14.1.2010 C(2010)91 final).
Article 107(3)(b) TFEU 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 107 (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 107 (1) TFEU, it is compatible with the internal market according to the Article 107 (3)(b) TFEU. 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. 37-57 of the letter ).
Extensions of the Hungarian liquidity scheme for banks - State Aid N225/2010,
N535/2010, SA.32994 (2011/N), SA.34078 (2011/N), SA.35144 and SA.36087
On 28 June 2010 (State aid case N 225/2010), on 7 December 2010 (State aid case N 535/2010), on 23 June 2011 (State aid case SA.32994 '2011/N') and finally on 14 December 2011, Hungary notified four requests to prolong the scheme for six months.
On 16 January 2013 Hungary notified a sixth and final prolongation of the scheme until 30 June 2013.
In each case, the Commission concluded that the notified extension of the scheme was compatible with the internal market. The Commission has accordingly decided not to 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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