EC Launches Probe of State Aid for Car Parts Investment in Hungary

EU

The European Commission on Thursday announced the launch of an in-depth investigation to assess whether EUR 43.8 million in government support for a new automotive components plant in an underdeveloped region in the north of the country comply with state aid rules, according to a report by state news wire MTI.

Rubin NewCo's new plant will take over the capacity of two other group production sites in Europe, creating around 1,500 jobs.

The EC acknowledged that the scale of the support is under the close to 32% state aid threshold for disadvantaged regions, but said it still aims to determine whether the aid is proportionate and has no undue negative effects on competition, as well as weigh the chances the investment could have been undertaken without the support.

It noted that Hungarian authorities say the investment would have been made in Turkey without the grant and tax benefit.

The EC said it "has doubts" on whether the aid is in line with EU rules. It added that the launch of the probe "does not prejudge in any way" its outcome.

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