ANNOUNCEMENT 01 Mar 2009In March 2009, the government of Hungary announced a change in private-sector financial support.
NUMBER OF INTERVENTIONS
State aid N 671/2008 - Hungary - LIP - Aid to Mercedes-Benz
Manufacturing Hungary Korl?tolt Feleloss?gu T?rsas?g - http://ec.europa.eu/competition/state_aid/cases/229017/229017_1036728_81_1.pdf
The Hungarian authorities intend to promote regional development by providing regional aid to Mercedes-Benz Manufacturing Hungary Kft. for the establishment of a new production plant for passenger cars in Kecskemét. The beneficiary of the aid will be Mercedes-Benz Manufacturing Hungary Korlátolt Felelosségu Társaság ("Mercedes-Benz Hungary"). Mercedes-Benz Hungary is a 100 per cent subsidiary of Daimler AG. The products supplied by the Mercedes-Benz Cars division range from the high-quality small cars of the smart brand to the premium automobiles of the Mercedes-Benz.
The financial support is given in the form of a cash grant and a corporate tax allowance. It will allow to Mercedes-Benz Hungary relieve the company from costs which it normally would have had to bear itself and therefore the company benefits from an economic advantage over its competitors.
The Commission gave the following assessment:
"The financial support in the form of a cash grant and a corporate tax allowance by the Hungarian authorities will be given for an investment resulting in the production of vehicles. Since this product is subject to trade between Member States, the support given is likely to affect trade between Member States." (par. 45 of the letter from the EC to Hungary).
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.