The announced arrival in Strasbourg of Hungarian Prime Minister Viktor Orbán today (18 January) has eclipsed any other highlights of the first session of the European Parliament for 2012. EURACTIV France reports from Strasbourg.
The session was expected to focus on the election of the new president and the priorities of the Danish EU presidency. However, on Tuesday (17 January) it became known that Orbán had invited himself to address the MEPs and address the criticism coming from what his spokesperson called "yet another attack from the international left".
The European Commission – led by the European People's Party-affiliated President José Manuel Barroso – started legal action yesterday over legislation that came into force at the beginning of the year under Hungary's new constitution.
The Commission sent three "Letters of Formal Notice" to Hungary – the first stage in the EU's infringement procedure – and decided to raise additional issues with Hungarian authorities to identify whether further action may be warranted under EU law, notably regarding concerns that the new measures weaken judicial independence.
The Hungarian authorities now have one month to respond to the Commission's concerns.
For the EU executive, the Hungarian legislation conflicts with EU law by putting into question the independence of the country's central bank and data protection authorities as well as the judiciary.
Brussels made an effort to keep its demarche low-key, with Barroso making a doorstep announcement, instead of a full-scale press conference with questions and answers.
"Hungary, like all member states, is obliged by the EU Treaties to guarantee the independence of its national central bank and its data protection authority and the non discrimination of its judges. The Commission is determined to take any legal steps necessary to ensure that the compatibility with European Union legislation is maintained," Barroso said.
Central bank in focus
The independence of Hungary's central bank appears as a key issue in a very difficult economic context for Hungary, which is seeking 'precautionary aid' from the EU and the International Monetary Fund as what the government calls "a kind of insurance policy" against possible future financing difficulties.
Under the new Hungarian laws, the economy minister can participate directly in the meetings of the central bank's Monetary Council, opening it to possible government influence.
The Commission has noted several concerns about the central bank overhaul:
- The agenda of the central bank meetings needs to be sent to the government in advance, thus impeding its capacity to hold confidential discussions.
- Changes in the remuneration scheme appear to put pressure on the bank.
- The governor and the members of the Monetary Council have to take an oath of fidelity to the country and its interests, which the Commission sees as problematic.
- Rules of dismissal for the governor and the members of the Monetary Council make them prone to political interference.
Informal talks between Budapest, the IMF and the Commission with a view to offering the country a financial bailout broke down in mid-December, as Hungary indicated it was about to change the laws regarding the independence of its central bank.
Hungary urgently needs the money to maintain access to international capital markets this year; it needs to refinance €4.8 billion of debt in the coming months.
Fresh talks between Hungary, the IMF and the Commission in Washington are scheduled to continue this week.
The judiciary is another area of concern for the Commission. Under new Hungarian laws, 274 judges (including those on the Supreme Court) face compulsorily retirement in contradiction of EU rules.
The government also strengthened powers over the data protection authority that contradict the EU Treaties, which require the agencies be independent.
The largest political group in the European Parliament is the centre-right EPP, whose vice president is Orbán. It is not surprising that Orbán has the support of the EPP, at least during the one-month period Hungary has to reply to the Commission's letters. Two more months after the Hungarians response could elapse before the Commission would decide on its next steps.
"There is no problem as long as it is not proven that Hungary is in breach of EU law," said Jean-Pierre Audy, president of the French delegation of the EPP group. Audy expressed doubts as to whether the EU executive was sufficiently equipped to pursue its investigation.