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Hungarian report Hungarian report
by Euro Reporter
2012-01-21 10:45:50
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Hungary PM backs down, seeks fast aid deal

Hungarian Prime Minister Viktor Orban gave the first concrete evidence on Friday that he is backing down in a dispute with the European Union, aiming to free up talks on aid needed to prop up its battered financial markets. Orban's conservative Fidesz party has been criticised by the international community for introducing a swathe of measures that threaten the independence of the media, the judiciary and the central bank since sweeping to power in 2010. Domestic financial markets have taken a hammering as a result, and while some analysts remain suspicious that Orban may try to hold out to impress his domestic political audience, they say the government now looks ready to give in.

Friday's move to abandon plans to merge the central bank and markets regulator was the first specific commitment since the prime minister made a broad pledge to the European Parliament earlier this week to compromise. His chief negotiator in talks with the IMF and EU also said the government's flagship flat tax policy was on the table. Orban said he expected to secure a political agreement with European Commission President Jose Manuel Barroso on the disputed laws next week and said he was ready to modify nearly all contested legislation to meet the EU's demands. "If we take stock of the issues that have emerged, I do not see any particularly difficult issues," Orban told Hungarian Kossuth radio. "Naturally, several laws may have to be modified, but the government cannot do it, this can be done only by parliament, and we will make proposals to this end."

The planned merger of the central bank and financial regulator had been a key point of contention. Orban later added that Budapest also no longer insisted on a government member being present at the bank's Monetary Council meetings as an observer. Austrian Vice Chancellor Michael Spindelegger, who visited Budapest for talks on Friday, told a joint news conference with Orban that the prime minister planned "a very clear timetable and very clear solutions regarding legal issues" for next week's meeting with Barroso. EU Economic and Monetary Affairs Commissioner Olli Rehn, who had a meeting on Friday with Tamas Fellegi, Hungary's minister in charge for aid negotiations, said the government would need to take concrete steps to ensure central bank independence as a condition for formal talks to start on a financing deal.


Hungary backtracks on new laws

Accused of undermining fundamental democratic principles, Hungary’s Prime Minister, Viktor Orban, beat a tactical retreat on Wednesday. He offered to change details of controversial new laws, but he rejected claims that his country was sliding toward authoritarianism. In an appearance before the European Parliament, Mr. Orban sought to defuse the mounting criticism of his government, including a decision on Tuesday by the European Commission, the bloc’s executive arm, to start legal action against Hungary over the new laws. The issues raised by the commission “could swiftly be resolved and remedied,” he told the Parliament, which was meeting in Strasbourg, France.

The 27-nation European Union has been grappling with what to do about member countries when they adopt policies that seem to undermine the union’s basic principles. Though nations must meet specific democracy criteria to join the bloc, once they are members there are relatively few sanctions available to enforce them. For that reason, the commission’s action against Hungary is based on technical issues rather than the wider concerns that Mr. Orban’s government is undermining democracy, centralizing power and destroying pluralism. The commission lodged objections to measures that threaten the independence of Hungary’s central bank and its data protection authority, and that change the retirement age of judges.

Mr. Orban appeared willing to give the most ground on the judge’s issue, while being more resistant on the central bank. If Hungary fails to satisfy the commission on those issues, the matter could go to the European Court of Justice, which has the authority to fine Hungary. Beyond that, under rules adopted after a far-right party became part of the Austrian government in 2000, the union can suspend a member country’s voting rights if it is found to be in breach of the union’s fundamental values. But that is seen as a “nuclear option,” said one official who was not authorized to speak publicly.


Media freedom in Hungary now under EU microscope

The European Union stepped up its criticism of Hungary's government on Wednesday, saying its crackdown on the media violates an essential freedom in EU countries. EU Vice President Neelie Kroes said that in addition to the three legal challenges against the bloc already has raised with the former Soviet-bloc country - which many fear may be slipping back toward authoritarianism - she also is worried that press freedom is under threat. The warning came hours ahead of Hungarian Prime Minister Viktor Orban's visit to the European Parliament to address his critics.

The EU Commission said Tuesday it had enough evidence to start legal proceedings in three sectors - the judiciary, the central bank and the data protection office - where it sees democratic rights under threat. The EU measures underscore an overall discomfort about Hungary, where critics fear a creeping fallback to a centralized one-party rule under Orban's Fidesz party. The Commission said the new Hungarian constitution that came into force Jan. 1 undermines the independence of the national central bank and the judiciary and does not respect data privacy principles. It cantered its challenge on legal and technical issues, but Kroes insisted that when it comes to the media something more fundamental is at stake.

Kroes said, "The respect of media freedom and media pluralism is not only about the technically correct application of EU and national law but also, and more importantly, about implementing and promoting these fundamental principles in practice." A key step in the centralization of power was a much-criticized Hungarian media law that has allowed the party to influence reports in the state media. Critical journalists have been fired and the threat of massive fines has pushed others into self-censorship. A private radio station, KlubRadio, which was critical of the government, has been stripped of its frequency - and could go off the air in weeks.  The fate of KlubRadio "comes in addition to the criticism by international and civil society organizations about the risks of disproportionately centralized control of media under Hungary's media law," a statement from Kroes' office said.

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