Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.
Factsheet for measure HU-2020-17/1241 – Updated – measures in Hungary
|Country||Hungary , applies nationwide|
|Time period||Temporary, 21 April 2020 – 31 December 2022|
|Type||Legislations or other statutory regulations|
Supporting businesses to stay afloat
– Direct subsidies (full or partial)
|Author||Nóra Krokovay (KOPINT-Tárki) and Eurofound|
|Measure added||05 October 2020 (updated 15 June 2022)|
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 coronavirus 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
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 targeted 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, it will be in a range of 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 had been made easier.
The following updates to this measure have been made after it came into effect.
|08 May 2021||
In line with the approval of the European Commission on 6 May 2021, a new Subsidy to Improve Competitiveness has been introduced by the Ministry for Foreign Affairs and Trade, with HIPA Nonprofit Ltd as the managing body. The new incentive program is available from 10 May 2021, for medium-sized and large enterprises throughout Hungary based on the amendment of the Decree 7/2020. (IV.16.) of the Ministry for Foreign Affairs and Trade on the subsidy to improve competitiveness required as a consequence of the COVID-19 pandemic. The beneficiaries shall invest at least €2 million by 31 December 2022 (this deadline could be extended by request through an amendment passed on 23 December 2021). In addition, a minimum of 25 new jobs must be created or a combined increase of 15% in sales revenue and gross wages reached. The investor also has to commit to maintain this increase in the two years following the completion of the investment.
The Hungarian Investment Promotion Agency (HIPA) has published a list of companies that successfully bid for the funding with 85 companies on the list (on Oct 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 on 30 September that 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.
|Does not apply to workers||
||Does not apply to citizens|
Company / Companies
EU (Council, EC, EP)
Social partners' role in designing the measure and form of involvement:
|Trade unions||Employers' organisations|
|Form||Not applicable||Not applicable|
Social partners' role in the implementation, monitoring and assessment phase:
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] (https://www.eurofound.europa.eu/sites/default/files/wpef19037.pdf)
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 defense of the covid-19 crisis, but felt the government was not going far enough in helping the most vulnerable sectors
Eurofound (2020), Subsidy to improve competitiveness in coronavirus pandemic, measure HU-2020-17/1241 (measures in Hungary), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/HU-2020-17_1241.html
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Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.