Politeía Digest

Quis custodiet ipsos custodes?

European Probe Fuels Tensions With Hungary

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By Gordon Fairclough

BUDAPEST—The European Union is investigating the legality of special “crisis” taxes imposed by Hungary on a handful of industries amid an escalating feud between the country’s new government and its increasingly outspoken critics elsewhere in Europe. Tensions have mounted as Hungary takes over the rotating presidency of the EU and could complicate the regional bloc’s efforts to make progress on a series of important measures aimed at bolstering the Continent’s economic recovery.

The probe of the taxes, which have fallen most heavily on large, foreign companies, comes on top of criticism of a new Hungarian media law by officials of other EU states and members of the European Parliament, who say it goes against the EU’s commitment to press freedom.

Hungary’s government has dismissed the complaints, saying the new temporary taxes, which are to last through the end of 2012, and the media law are in line with the spirit and the letter of EU treaties and regulations.

“This is a politically motivated and coordinated attack” by companies unhappy about the taxes and their home-country governments, said Zoltan Kovacs, a state secretary in Hungary’s Ministry of Public Administration and Justice. “It’s payback, with interest.”

Senior European officials, including the head of the EU’s executive branch, José Manuel Barroso, and other members of the European Commission are to meet with Hungarian Prime Minister Viktor Orban this week in Budapest to mark the start of Hungary’s six-month presidency.

The agenda for the talks hasn’t been set, but “it is very likely that someone will raise these questions,” Olivier Bailly, an EU spokesman, said Monday.

In some ways the dispute between Budapest and Brussels goes to the heart of a debate over the proper distribution of power between national governments and the central authorities of the European Union. Read more in The Wall Street Journal.

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Written by Theophyle

January 4, 2011 at 8:19 am

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