New EU probe to start against Hungary

The European Commission on Thursday announced the launch of an in-depth investigation to assess whether a 43.8 million euro government grant for a new automotive components plant in an underdeveloped region in northern Hungary complied with state aid rules.

Rubin NewCo’s new plant would take over the capacity of two other group production sites in Europe, creating around 1,500 jobs. The EC acknowledged that the scale of the support is under the 31.88 percent EU threshold for state aid in disadvantaged regions. The probe aims to determine whether the grant is proportionate and has no undue negative effects on competition, the body said.

It noted that Hungarian authorities say the investment would have been made in Turkey without the grant and tax benefit.

The EC said it “has doubts” on whether the aid is in line with EU rules. It added that the launch of the probe “does not prejudge in any way” its outcome.