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Document 32009D1017
Council Decision of 22 December 2009 on the granting of State aid by the authorities of the Republic of Hungary for the purchase of agricultural land between 1 January 2010 and 31 December 2013
Council Decision of 22 December 2009 on the granting of State aid by the authorities of the Republic of Hungary for the purchase of agricultural land between 1 January 2010 and 31 December 2013
Council Decision of 22 December 2009 on the granting of State aid by the authorities of the Republic of Hungary for the purchase of agricultural land between 1 January 2010 and 31 December 2013
SL L 348, 29.12.2009, p. 55–56
(BG, ES, CS, DA, DE, ET, EL, EN, FR, IT, LV, LT, HU, MT, NL, PL, PT, RO, SK, SL, FI, SV)
In force
29.12.2009 |
EN |
Official Journal of the European Union |
L 348/55 |
COUNCIL DECISION
of 22 December 2009
on the granting of State aid by the authorities of the Republic of Hungary for the purchase of agricultural land between 1 January 2010 and 31 December 2013
(2009/1017/EU)
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the Functioning of the European Union and in particular Article 108(2), third subparagraph, thereof,
Having regard to the request made by the Government of the Republic of Hungary on 27 November 2009,
Whereas:
(1) |
On 27 November 2009, the Republic of Hungary (hereinafter referred to as ‘Hungary’) presented to the Council a request for a decision in accordance with the third subparagraph of Article 88(2) of the Treaty establishing the European Community, concerning Hungary’s plan to grant State aid to Hungarian farmers for the purchase of agricultural land. |
(2) |
The land privatisation process which Hungary has been engaged in since the beginning of the 1990s has in many cases led to fragmented or undivided joined ownership of agricultural land, resulting in an unfavourable land use structure and poor economic viability of agricultural holdings. |
(3) |
In view of farmers’ lack of capital, the high interest rates on commercial loans for the purchase of agricultural land and the tightening up of the banks’ criteria for the granting of loans to farmers in the current crisis, farmers, especially those with smallholdings, have little prospect of taking out commercial loans for investments such as the purchase of land. In fact, as a result of the financial and economic crisis, annual interest rates on commercial loans for the purchase of agricultural land increased from an average rate of 9,5 % in July 2008 to 15,5 % in May 2009, and the average value of collateral required for such loans nearly doubled in that same period. |
(4) |
In this situation, speculative land purchase by economic operators not engaged in agricultural activity who have easier access to capital is likely to increase. |
(5) |
State aid for the purchase of agricultural land should help save the livelihood of numerous farming families in the current crisis by creating the enabling conditions for reducing production costs and improving profitability of agricultural production, thus halting the increase in poverty and unemployment in rural areas. As a result of the crisis, unemployment in Hungary rose from 7,7 % in the period from August 2008 to October 2008 to 10,4 % in the same period in 2009, while Hungary’s Gross Domestic Product (GDP) decreased between the third quarter of 2008 and the third quarter of 2009 by 7,2 %. Moreover, Hungary’s GDP at current prices in the agriculture, forestry and fisheries sector fell by approximately 33 % between the first half of 2008 and the first half of 2009 (from Hungarian forint (HUF) 410 828 million to HUF 275 079 million). |
(6) |
The State aid to be granted amounts to a total of HUF 4 000 million and should benefit approximately 5 000 agricultural producers. It should take the form of:
|
(7) |
It is not permitted to combine State aid in the form of an interest subsidy and a direct grant for the purchase of the same area of agricultural land. |
(8) |
The Commission has not at this stage initiated any procedure nor taken a position on the nature and compatibility of the aid. |
(9) |
Exceptional circumstances therefore exist, making it possible to consider such aid, by way of derogation and to the extent strictly necessary to limit the extent of rural poverty in Hungary, to be compatible with the internal market, |
HAS ADOPTED THIS DECISION:
Article 1
Exceptional State aid by the Hungarian authorities in the form of interest subsidies and direct grants for the purchase of agricultural land, amounting to a maximum of HUF 4 000 million and allocated between 1 January 2010 and 31 December 2013, shall be considered to be compatible with the internal market.
Article 2
This Decision is addressed to the Republic of Hungary.
Done at Brussels, 22 December 2009.
For the Council
The President
A. CARLGREN
(1) Measurement unit of the quality of agricultural land in Hungary.