EC clears EUR 1.55 bln Hungarian guarantee scheme for hard-hit companies
The European Commission approved a EUR 1.55 billion guarantee scheme to support companies negatively impacted by the coronavirus pandemic, according to a report by state news wire MTI.
Under the scheme, guarantor Garantiqa, in which the state is a stakeholder, will provide guarantees on loans up to HUF 5 bln per company, while the state-owned Hungarian Development Bank (MFB) will provide guarantees on loans between HUF 5 bln and HUF 10 bln per company.
The scheme aims to provide 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 pandemic. The scheme will be open to microbusinesses, SMEs, and large companies.
The scheme was approved under the state aid Temporary Framework adopted by the EC to enable member states to use the full flexibility foreseen under state aid rules to support the economy in the context of the coronavirus outbreak.
The EC said the scheme is "necessary, appropriate and proportionate" to remedy a serious disturbance in Hungaryʼs economy.
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