Hungary denies claims it has withheld Hankook subsidies

By David Shaw

Budapest -- A spokeswoman for The Hungarian Investment and Trade Development Agency has said all its arrangements with Hankook Tyre are proceeding normally. The spokeswoman added that there are no delays in the procedure and both sides are acting fully within the terms of their contract.

The spokeswoman was responding to questions following press reports that the Hungarian government had with-held parts of a government subsidy to Hankook.

The spokeswoman added, "The Hungarian Government found the project of Hankook Tyre Ltd. of utmost significance to the Hungarian economy because of its investment volume, its job creation capacity and the level of technology among other factors. The investment has already significantly contributed to the development of the Hungarian economy and the regional growth around Dunaújváros."

She said the terms of the contract do not allow the government to withhold funds as a penalty for non-contractual matters, "The Government cannot intervene in a company's own labour or wage policy." She added that if a company breaks Hungarian law, then there are other penalties and sanctions that can be used, but the subsidy is completely independent of any such action.

She added that the press has reported on matters related to a subsidy granted by the Hungarian Ministry of Social Affairs and Labour, but declined to comment on those reports, saying they were outside her area of responsibility.