EU, state grants to support business developments triple in 2009

Payouts of European Union and state grants to support business developments in Hungary have more than tripled in the last ten months, while the number of applications for funding that have been approved has doubled, department head at the National Development Agency Magdolna Kocsis said at a conference organised by the Joint Venture Association (JVSZ) on Tuesday, business daily Vilaggazdasag reported on Wednesday.

Payouts from the Economic Development Operative Programme (GOP), the framework for business development grants from EU funding and state co-financing, came to HUF 59bn in January-October, up from HUF 16bn a year earlier, the paper said, citing data compiled by the Unified Monitoring Information System. The money was paid out on 3,954 contracts, up from 1,029 a year earlier.

Ms Kocsis said different incentives offered applicants as well as an easing of conditions in the first half of 2009 were healthy and useful.

Gabor Ormosy, the director of the Hungarian Economic Development Centre (MAG), suggested banks may also have contributed to the increase in payouts and applications. “There are already signs that bank financing structures are beginning to recover, though they will never reach the level before the crisis,” he said. “A new balance is beginning to take shape,” he added.

About 90pc of EU funding available to Hungary has not yet reached the economy, Zsombor Essosy, head of the Hungarian Application Preparation Office, told the conference. Organisations that assist businesses with the application process can speed up payouts of this money, and if the staff at the National Development Agency needs to be doubled, then so be it, he added.

Hungary’s government asked the European Commission last December to allow the country to regroup funding among its various operative programmes. The Commission approved the request in August and an additional HUF 111bn was reallocated to the Economic Development Operative Program.