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Commission approves €1.55 billion Hungarian guarantee scheme to support companies affected by #Coronavirus outbreak

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The European Commission has approved a €1.55 billion (approximately HUF 550 billion) Hungarian aid scheme to support the Hungarian economy in the context of the coronavirus outbreak.

The scheme was approved under the state aid Temporary Framework adopted by the Commission on 19 March 2020, as amended on 3 April 2020. Under the scheme, the public support provided by Garantiqa will take the form of State guarantees on new and existing investment and working capital loans.

The support provided by the Hungarian Development Bank will take the form of State guarantees on new investment and working capital loans. The guarantees will be channelled through credit institutions. The scheme aims at providing liquidity to those companies which are most severely affected by the economic impact of the coronavirus outbreak, helping them to continue their activities, start investments and maintain employment during and after the outbreak.

The scheme will be open to micro, small and medium-sized enterprises (SMEs) and large companies. The Commission found that the measures are in line with the conditions set out in the Temporary Framework. The Commission concluded that the measures arenecessary, appropriate and proportionate to remedy a serious disturbance in the economy of a member state, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework. On this basis, the Commission approved the measures under EU state aid rules.

Executive Vice President Margrethe Vestager (pictured), in charge of competition policy, said: “The €1.55bn scheme will enable Hungary to provide public guarantees on loans to companies affected by the coronavirus outbreak. The measures will help businesses cover their immediate investment and working capital needs, and support them to continue their activities and maintain employment during and after the crisis. We continue to work closely with all member states to ensure that national support measures can be put in place in a timely, co-ordinated and effective way, in line with EU rules.”

The full press release is available online.

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