The European Commission will suspend an infringement procedure over the independence of Hungary's Central Bank today (25 April), clearing the way for an international financial aid plan for Budapest. However, it will simultaneously take Hungary to the European Court of Justice over data protection and judiciary issues.
Hungarians voted overwhelmingly in April 2010 for a radical change in leadership, sending the ruling Socialists into opposition and giving the centre-right a qualified majority in parliament.
The election marked the biggest victory for any political party in a general election since the fall of communism 21 years earlier. However, several measures put in place by the new government have since fuelled controversy.
A controversial new constitution that entered into force on 1 January brought tens of thousands of protestors to the streets. They believe it undermines the independence of the central bank, the judiciary and the news media. Critics also say that the new measures represent an assault on religious freedom by cutting down the number of recognised religious groups from 300 to 14.
The European Commission opened three “accelerated infringement proceedings” in mid-January over the independence of the Central Bank and data protection authority and concerning measures that could affect the judiciary.
Viviane Reding, the EU justice commissioner, will go ahead with two proceedings against Hungary which have raised concern across Europe in the past months (see background).
She is expected to receive approval today by the College of Commissioners over Hungary’s referral to the Court of Justice in two different cases.
The first case concerns the retirement age of judges, notaries and prosecutors, which was recently lowered to 62 from 70. The change forced 274 judges to be forced into retirement.
Brussels considers this move illegal and contrary to EU law.
The European Commission has also “broader concerns about the independence of the judiciary”, according to an EU internal note, but will not go ahead with an infringement procedure on this wider matter, because it lacks the legal powers to do so.
Reding will also go ahead with a second infringement procedure and will take Budapest to the Court of Justice over the independence of the data protection supervisor. Brussels considers the lack of autonomy of the independent authority caused by recent laws as detrimental to citizens and media.
Case suspended over National Bank
In a related matter, the Commission decided to suspend an infringement proceeding over the independence of Hungary's Central Bank after Hungarian Prime Minister Viktor Orbán made a number of commitments to EU authorities over its independence, which appeared to satisfy Brussels.
The case will be dropped “provided Hungary follows through on the measures it has communicated,” reads a note by the EU executive that will be made public later today.
“Commission President José Manuel Barroso welcomed the commitments made by Orbán on the prompt and full implementation of the measures regarding the independence of the central bank announced by the Hungarian authorities,” said a spokesperson after a meeting between Barroso and Orbán yesterday.
“The Commission is prepared to close this case once the legislation is adopted,” adds an internal note of the Commission, seen by EurActiv.
This EU decision is expected to pave the way for Hungary to start talks with international donors about a loan to be provided by the International Monetary Fund to help the strained Hungarian economy.