Capital injection into Hungarian development bank approved
The European Commission has approved a EUR 2 billion capital injection into development bank Magyar Fejlesztési Bank (MFB), which will be funded by the Recovery and Resilience Facility.
The aim is to provide the bank with the capacity to ensure financing in various sectors with market failures, such as infrastructure, agriculture, environmental protection, education, tourism, sports, urban and rural development, and regional convergence.
The Commission assessed the Hungarian measure under EU State aid rules, in particular Article 107(3)(c) of the Treaty on the Functioning of the EU, which enables Member States to support the development of certain economic activities under certain conditions. The Commission found that the measure facilitates the development of economic activities, including for infrastructure, agriculture, environmental protection, education, tourism, sports, rural development, regional convergence and urban development, is necessary and appropriate to achieve the objectives pursued and is proportionate as it is limited to bridging market gaps, so that distortions of competition are minimised.
With regards to its compatibility with the internal market, Hungary has committed to several measures, including the limitation of financial activities to relevant market failures and the implementation of measures to prevent crowding out private sector operators, to ensure that MFB will not undercut private financial institutions active in the Hungarian market.
For further information, see its specific PR.