Commission approves €145 million Hungarian scheme to compensate large companies for damages suffere…

The European Commission has approved under EU state aid rules a HUF 50 billion (approximately €145 million) Hungarian scheme to compensate large companies for the damages suffered due to the coronavirus outbreak and the confinement measures that the Hungarian government had to implement to limit the spread of the virus.

Under the scheme, companies will be entitled to compensation of the damages incurred in the form of direct grants. The compensation will cover up to 100% of the difference between the operating results of the company concerned during the compensation period and its operating results in a reference period before the coronavirus outbreak.

The Hungarian authorities will carry out ex post controls based on reports by independent auditors to ensure that the compensation does not exceed the actual damage suffered. The public support in excess of the actual damage received by the beneficiaries will have to be paid back to the Hungarian state. The support will be accessible to large companies active in all sectors with the exception of companies active in the primary agriculture sector and in the fisheries and aquaculture sectors. It is estimated that approximately 50 to 100 enterprises will benefit from the support.

The Commission found that the Hungarian scheme is in line with Article 107(2)(b) of the Treaty on the Functioning of the European Union (TFEU), which enables the Commission to approve state aid measures granted by member states to compensate specific companies or specific sectors for the damages directly caused by exceptional occurrences, such as the coronavirus outbreak. The Commission found that the Hungarian aid scheme will compensate damages that are directly linked to the coronavirus outbreak. It also found that the measure is proportionate, as the envisaged compensation does not exceed what is necessary to make good the damage. The Commission therefore concluded that the scheme is in line with EU state aid rules.

The non-confidential version of the decision will be made available under the case number SA.57375 in the state aid case register on the Commission’s competition website once any confidentiality issues have been resolved.

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