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Brussels approves Hungarian subsidized state guarantees

  The European Commission (EC) has authorized a Hungarian scheme aimed at providing relief to companies encountering financing difficulties as a result of the credit squeeze in the current economic crisis, the EC announced on Monday.

The scheme allows authorities to grant aid in the form of subsidized guarantees for investment and working capital loans concluded by December 31, 2010.

“By facilitating access for firms to loans, the notified measure is an effective way of encouraging business investment and economic recovery, without unduly distorting competition”, Competition Commissioner Neelie Kroes said in the announcement.

The scheme meets the conditions of the Commission’s Temporary Framework for state aid measures agreed on 25 February 2009, because it is limited in time, respects the relevant thresholds and applies only to companies that were not in difficulty on 1 July 2008, the EC statement said.

The scheme allows aid to be granted at central, regional and local level. The scheme can be applied to SMEs as well as to large firms, and the guarantee amount can also be higher than €2.5 million. The maximum duration of guarantees granted under the scheme is limited to ten years. (MTI-Econews)