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Ministries say EC decision puts voucher programs at risk

Initiatives

A decision by the European Commission to take Hungary to court over recently introduced food and recreation vouchers could put resources for the new system at risk, the Public Administration and Justice Ministry and the National Economy Ministry said in a joint statement. The decision by the EC could endanger operating resources for the Erzsébet program, which the government operates as a social program, as well as put at risk the financial foundation for a recovery of domestic tourism supported by the Széchenyi recreation card (SzÉP), the ministries said. The EC said earlier on Thursday that it had brought Hungary before the Court of Justice to contest restrictive conditions on the issue of the food and recreation vouchers. It said the restrictions were contrary to the fundamental principles of the freedom of establishment and the freedom to provide services.
    Hungary established a unified voucher system under a government initiative in 2012. The new system contains two elements: the SZEP card, an electronic system used for hot meals or recreation; and the Erzsébet voucher, only used for food. The EC said the legislation “created a monopoly” for the issuer of the Erzsébet vouchers and subjected issuers of the SzÉP card to “particularly restrictive conditions,” effectively barring all but three financial institutions from the market. The EC acknowledged arguments made by Hungary that the restrictions are “justified...for the protection of consumers, creditors and recipients of services and...by social policy and fiscal coherence objectives.” But it said the measures went “beyond that which is necessary and proportionate to guarantee the objectives in the public interest.”
    The ministries said in their response to the decision that the Erzsébet program was a social program and service. Establishing the financial basis for such social tasks is within the scope of influence of the member state, not the EU, they said. The ministries also noted that there was an effective monopoly on the market for issuing recreation vouchers before the introduction of the SzÉP card, with just a single player. Now, there are three players, among them both domestic and foreign owned ones, they said. The EC decided to bring the case involving the vouchers before the Court of Justice after Hungary failed to bring legislation in line with a reasoned opinion it sent in November 2011. The referral to the Court of Justice is the last step in the infringement procedure.

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