The European Commission on Wednesday said it opened an in-depth investigation to establish whether government assistance for Hungarian fertilizer maker Péti Nitrogénművek infringes state aid rules.
The Commission said Hungary had failed to inform it of the aid measures and it “has serious doubts as to whether they are compatible with the Common Market.” The in-depth investigation will allow interested parties to comment on the measure under scrutiny.
The aid to Péti Nitrogénművek included state guarantees on an investment loan of €52 million and debt amounting to HUF 10 billion, both from the state-owned Hungarian Development Bank (MFB).
Finance Ministry press chief Ferenc Pichler told MTI that the ministry believes no EU rules were broken in the case of Péti Nitrogénművek. The Hungarian government will comply fully with the investigation, he added. The conditions for the state guarantees were the same as market guarantees, so there can be no talk of breaking any rules, Pichler said.
Péti Nitrogénművek shut down it plant in October after it lost its bank financing, but it restarted in late February after receiving the HUF 10 billion loan from MFB, Econews reported earlier.
Although aid may be granted to companies affected by the credit crunch under the Commission’s temporary framework to tackle the effects of the economic crisis, these measures require the Commission’s formal approval, the Commission noted.
Péti Nitrogénművek has capacity to make 90,000 tons of artificial fertilizer a month. (MTI-Econews)