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EC blocks state aid for car parts investment in Hungary

The European Commission on Tuesday said it found that Hungary's plans to grant 43.8 million euros in state aid for a vehicle parts plant in the underdeveloped north of the country were not in line with European Union rules on state aid.

“Hungary failed to prove that the aid was decisive for the beneficiary to locate its investment in Hungary,” the EC said, explaining that available evidence showed that the beneficiary, GKN Automotive Hungary, had already decided to invest in Hungary without considering the public support. As the state aid had no real “incentive effect”, the EC said it was incompatible with state aid rules and could not be granted.

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