Hungary’s difficulties with the EU have taken a new twist with Brussels threatening legal action if the country does not do more to get a grip of its huge debt. Already in the dog house over its new constitution, the latest warnings from the EU add to Budapest’s economic woes, putting a potential financial bail-out in jeopardy.
European Commission spokesperson Pia Ahrenkilde Hansen said: “Without pre-judging the final outcome of this analysis, the Commission is committed to fully using all its powers to analyse the compatibility of national law with EU law and reserves the right to take any steps that it deems appropriate, namely the possibility of launching infringement procedures pursuant to article 258 of the treaty.”
There are signs in Hungary, however, that the government is willing to make some concessions over the more controversial aspects of its new constitution.
EU and IMF officials had warned Budapest it must make changes, particularly over the independence of its central bank, if it wants a new financial rescue deal.
Last week Hungary’s credit rating was downgraded to junk status, underscoring investor doubts over the current economic and political climate in the central European country.