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Gov't urges subsidized loans, not grants, for SMEs

Parliament

The government believes development subsidies for SMEs should come mainly in the form of preferential loans rather than grants, Prime Minister Ferenc Gyurcsány said on Thursday, after a meeting of the National Development Council.

"If businesses are not backed by a genuine ability to take risks, if they want to use public money to take risks and then to create private property using the yields, that raises some serious moral issues," Gyurcsány said. Gyurcsány said he had asked the National Development Council to form an opinion on the matter. He added that some Ft 3,000 billion in development support would be available to SMEs during the 2007-2013 EU budgetary period. Speaking about the 2007 budget, Gyurcsány said that they plan a very tight budget. He named two areas where allocations would not be reduced: pensions and family allowances on the one hand and national co-funding requirements for EU subsidies on the other. He also said that the government aim to concentrate on building highways, rather than motorways, citing "significant tension" in the development of the country's infrastructure. Gyurcsány said the government would approve the latest version of the New Hungary Development Plan next week, then submit it to Brussels. (Mti-Eco)

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