Supporting SMEs and digital infrastructure in Hungary with EU funding during the coronavirus crisis

On 5 June, the European Commission has approved an amendment of the Economic Development and Innovation Operational Programme (EDIOP) that help fight the probable negative impact of the coronavirus pandemic on the Hungarian economy and support its resilience, such as:

• Widen the scope of eligible beneficiaries for non-repayable support (grants)

Up until now, the OP targeted SMEs active in the manufacturing sector for grant support (except for the least developed area of the country). With the amendment, the support became available to a wider range of companies, notably in the service sector, which had been particularly hit by the crisis.

• Provide more liquidity to SMEs.

The Commission’s decision enabled the reallocation of up to €320 million to provide working capital loans to SMEs. The move aims to provide much needed liquidity support to companies facing challenges in the current period.

• Support investments in High-Performance Computing (HPC) to reflect European and national digital priorities.

To support the digital transformation of the economy, the amendment reallocated significant resources to develop the Hungarian branch of the EuroHPC initiative. The currently available amount of €14.5 million will, among others, finance the upgrade of the country’s most developed HPC infrastructure in Debrecen to reach a performance level that qualifies to join the EuroHPC network.  

The new, more flexible set of rules known as the Coronavirus Response Investment Initiative packages (CRII and CRII+) facilitated the accelerated adoption of the amendment. Furthermore, CRII and CRII+ allowed the EDIOP to finance an employment programme that provides short-time working support to companies that would otherwise have to lay off employees due to reduced economic activity. Via this scheme the employees’ wages for the hours not worked are supported by grants from the European Social Fund, allowing them to stay in employment with reduced working hours.

The Economic Development and Innovation Operational Programme (EDIOP) is Hungary’s biggest programme focussing on investments in small and medium-sized enterprises (SMEs) and workers with a total allocation of €8.8 billion. It is also the main programme involving financial instruments (amounting to €2.3 billion).