ANNOUNCEMENT 15 Jun 2009

In June 2009, the government of Hungary announced a change in private-sector financial support.

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

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=3_N355_2009 >


Inception date: 18 Feb 2009 | Removal date: 18 Jun 2013
Still in force

Bailout (capital injection or equity participation)

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.
 

Updates: The measure was prolonged several times:

  • On 17 December 2009 (N662/2009)
  • On 23 June 2010 (N224/2010)
  • On 23 June 2011 (SA.32995)
  • On 8 March 2012 (SA.34077)
  • On 30 July 2012 (SA.35145)

On 31 January 2013, Hungary finally notified a last prolongation until 30 June 2013. (SA.36088)
 
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.
 

AFFECTED SECTORS

 

AFFECTED PRODUCTS

 
N/A