State aid: Commission approves €132.5 million Hungarian aid scheme to support catering, culture, sports and accommodation sectors in the context of coronavirus outbreak

The European Commission has approved a HUF 47.5 billion (approximately €132.5 million) Hungarian aid scheme consisting of four measures, to support the catering, culture, sports and accommodation sectors, which have been affected by the coronavirus outbreak. The scheme was approved under the State aid Temporary Framework. The scheme will be open to employers active in these sectors, provided that they have experienced a significant reduction in their business activities in November 2020 due to the coronavirus outbreak. The scheme aims at alleviating the employer’s costs and avoiding lay-offs. It also aims at mitigating the liquidity shortages that the beneficiaries are facing and ensuring the continuity of their economic activity during and after the outbreak. The public support for the catering, culture and sports sectors will take the form of wage subsidies, consisting of: (i) exemptions from fiscal obligations born by the employers, amounting to a maximum of 20.75% or 15.75% (depending on the beneficiary’s tax regime) of the monthly gross salary paid to the employees; and (ii) direct grants amounting to 50% of the employees’ gross salary. The Commission found that these measures are in line with the conditions set out in the Temporary Framework. In particular, the aid will not exceed 80% of the employees’ monthly gross salary and will be granted for a period of no longer than 12 months. The public support for the accommodation sector will target to offer compensation in the form of (i) support for uncovered fixed costs; or (ii) limited amounts of aid, if beneficiaries are not eligible for support for uncovered fixed costs. The Commission found that these measures are also in line with the conditions set out in the Temporary framework. In particular, the amount of uncovered fixed costs to be compensated will be based on forecasted losses, which will be supervised via an ex-post control of realised losses based on audited or on tax accounts for the year of 2020. Also, the aid intensity will not exceed 70% of the uncovered fixed costs, except for micro and small enterprises, where it will not exceed 90% of the uncovered fixed costs. The Commission concluded that the measures are necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework. On this basis, the Commission approved the scheme under EU State aid rules. The non-confidential version of the decision will be made available under the case number SA.59477 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved.