Background information

Under decree 7/2020 of the Ministry of Foreign Affairs (KKM) medium and large companies can apply for funding to improve their competitiveness amid the COVID-19 crisis. The budget for the subsidy programme was originally set at HUF 50 billion (€140 million), but later raised to HUF 169 billion (€469 million). On 6 October the foreign minister said that as a result of long discussions with the European Commission, now large companies can receive funding in proportion to investment pledges without a spending ceiling

Content of measure

Applications for the funding must be filed to the Hungarian Investment Promotion Agency (HIPA). Companies must agree to make investments and to keep employees during their participation in the programme.

Enterprises must show that their sales revenue or the volume of their orders has dropped by 25% as a result of the COVID-19 outbreak and there is a causal link between the outbreak and the losses. The measure targets medium and large enterprises in the manufacturing and BSC sectors, who are “ready to take their business to the next level”. The non-refundable subsidy scheme to improve competitiveness has a maximum subsidy amount of €800,000 per company. The costs of building, land purchase and purchase of assets and intangible assets are also eligible. The amount of aid received depends on the size of the investment. Aid ranges from 30-50% of the value of the investment or €150,000 to €800,000.

On 6 May the HIPA said that the processing of applications has been improved.

Use of measure

The Hungarian Investment Promotion Agency (HIPA) published a list of companies that successfully bid for the funding with 85 companies on the list (on October 6). The budget for the subsidy programme was originally set at HUF 50 billion (€140 million), with European Commission approval, HIPA said.

On May 28 the call for bids was suspended. In June, the budget was raised to HUF 169 billion (€469 million) of which HUF 150 billion had been paid out to projects until 31 August 2020, HIPA said. According to a press report, the call for applications to receive the remaining HUF 18 billion in the funding scheme was announced at 8am on 1 September 2020, and the subsidy budget was reached within 15 minutes.

The foreign minister said as of 30 September 904 companies were supported in 30 different sectors, creating investments worth HUF 425 billion (€1.18 billion) and that 155,000 jobs were saved as a result.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Larger corporations	Does not apply to citizens

Actors and funding

Actors	Funding
National government Company / Companies EU (Council, EC, EP)	Companies European Funds National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Informed	Informed
Form	Not applicable	Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

• No involvement
• Main level of involvement: Sectoral or branch level

Involvement

The channels of social dialogue in Hungary are fragmented and structures and processes are underdeveloped. Government policy affecting working life is often made outside the interest-reconciliation forums, and, despite strong protest, consultations have little influence. Social partners are mixed in their opinions on whether their involvement would best qualify as "informed" or "consulted", many would rather see it as being in between those two categories, with little influence on the final outcome. You can read more about social dialogue in Hungary here

Views and reactions

There were no social partner reactions raised to this particular case. In general, both the employer and employee sides welcomed government support to businesses in defence of the COVID-19 crisis, but felt the government was not going far enough in helping the most vulnerable sectors

Sources

• 16 April 2020: Foreign Ministerial decree 7/2020 (njt.hu)
• 07 June 2020: Challenge and opportunity state aid in the covid-19 crisis (bbj.hu)
• 11 June 2020: Subsidy budget raised to HUF169b
• 01 September 2020: HUF18m support gone in 15 min
• 30 September 2020: Szijjarto: 155,000 jobs protected (koronavirus.gov.hu)
• 06 October 2020: HIPA-Competitiveness subsidy winner (hipa.hu)
• 06 October 2020: Subsidy to large companies available
• 08 May 2021: New VIP subsidy to improve competitiveness for SMEs (hipa.hu)
• 20 December 2021: Changes in the deadline to complete the investment (hipa.hu)