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Hundreds of billions in EU funding to help Hungary preserve jobs

Hungary has access to slightly more than EUR 500 million (HUF 180 billion) of soft loans from the EU's SURE Fund for job retention.

Hungary will receive EUR 504 million from the SURE Fund, a European instrument providing temporary support to mitigate Unemployment Risks in an Emergency. With this fund, the EU aims to provide exceptional financial support to those Member States that have spent significant sums to offset the negative labor market and economic effects of the coronavirus epidemic.

The total budget of the EU support fund was EUR 100 billion, of which EUR 90.3 billion was called, an amount that was divided between 18 Member States; applications are still open for the remaining EUR 9.7 billion. 

At the beginning of February, Hungary had already drawn HUF 108 billion from this fund to help domestic wage problems caused by the coronavirus. The Hungarian amount is extremely low, but this is not surprising due to unemployment in Hungary not increasing significantly in 2020. In addition, in the last quarter of 2019, Hungary had an extremely low unemployment rate of 3.3 percent. In comparison, in the same period of 2020, this value was 4.3 percent in the fourth quarter, which means an increase of only 1 percent, which is also good data at the European level.

The loan underlying SURE is covered by guarantees given voluntarily by Member States based on their share of GNI within the EU. Member States receive support in the form of soft loans. To help finance SURE, the Commission issued a social investment bond on October 21, 2020, totaling EUR 17 billion via two bond issuances. The first package contained EUR 10 billion in bonds, which will be repaid in October 2030; the other EUR 7 billion package is due in 2040. The securities received a huge 13-fold oversubscription.

The SURE social investment bond was listed on the Luxembourg Stock Exchange on 27 October 27, 2020, and will be displayed on the Luxembourg Green Exchange as sustainable securities.

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