Hungary may offer concessions to appease EU and IMF

Hungary has said it may tone down some of the more controversial parts of its new constitution, amid growing international financial and political pressure.

Both Brussels and the IMF are calling on Budapest to re-think a wave of new laws, which critics have described as undemocratic.

The talk from the EU Commission is increasingly tough.

‘‘We can ask the European Court of Justice to punish a member state for simply not complying with community law and ask that member state to change its law, this would be the most likely path. Since the Lisbon Treaty came into being the court has been able to enforce this option through financial penalties.’‘

One of the chief concerns is that the changes will undermine the independence of Hungary’s central bank, jeopardising aid talks. Investors appear increasingly nervous. Experts believe Budapest will be forced to back peddle with Hungary’s currency, the forint, already falling to new lows against the euro.

“The pressure on Hungary to have an agreement with the European Commission and the IMF is extremely high and increasing and I think that this pressure will also force the government to comply with the demands of the European institutions,” said Zsolt Darvas from the Bruegel Institute.

Popular discontent has also piled pressure on Hungary’s government with tens of thousands of protesters demonstrating against the constitutional changes on New Year’s Day.

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