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IP/10/1749

Brussels, 20 December 2010

State aid: Commission authorises prolongation of Hungarian real economy scheme; first following extension of crisis package

The European Commission has authorised under EU state aid rules the prolongation until 31 December 2011 of a Hungarian scheme to grant limited amounts of aid (up to €500 000 per beneficiary) to companies that experience difficulties to access finance in the wake of the financial crisis. The Commission has concluded that the scheme is in line with the Commission's temporary framework on aid to business during the crisis, that the Commission decided on 1 December 2010 to partially extend until 31 December 2011 (see IP/10/1636).

Under the temporary Hungarian scheme, beneficiaries must apply for aid no later than 31 December 2010 and the Hungarian authorities must grant the aid no later than 31 December 2011. The Commission found the extension of the scheme, initially approved on 24 February 2009 (see IP/09/325), to be in line with its Temporary Framework for businesses' access to finance during the crisis (as extended on 1 December 2010), because it is limited in time, respects the relevant thresholds and applies only to companies that were not in difficulty on 1 July 2008. The extended measure can thus be considered as appropriate to remedy a serious disturbance in the Hungarian economy and is, as such, compatible with Article 107(3)(b) of the EU Treaty.

Background

In December 2008, the Commission adopted a temporary framework, valid until 31 December 2010, to counter the effects of the credit crunch brought about by the crisis on the financial markets, where even healthy companies experienced difficulties in obtaining financing on the markets (see IP/08/1993). In particular, the framework enabled Member States to grant, under certain conditions, subsidised loans, loan guarantees at a reduced premium, risk capital for SMEs and direct aids of up to €500 000.

The purpose of the framework was to help companies overcome temporary difficulties in accessing finance, during the exceptional circumstances created by the financial and economic crisis. As the economic situation improves, these exceptional aid measures become less necessary and can be gradually phased-out, to allow for the indispensable restructuring of European industries and to limit distortions of competition in the Internal Market. On the other hand, the signs of recovery are still fragile and Member States should retain sufficient flexibility for punctual interventions for some more time.

The Commission therefore decided to prolong the temporary framework for another year, while at the same time adapting it, so as to encourage a gradual return to normal market conditions. In particular, companies in difficulties will be excluded from temporary framework measures as of 1 January 2011.


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