Hungary's EU presidency starts on wrong foot
Viktor Orban - Van Rompuy - Photo EU Council
(BRUSSELS) - Hungary kicked off its prestigious six-month presidency of the European Union missing the mark Monday as Brussels demanded clarification over its hotly-contested new press and tax laws.
Just 48 hours after Hungary took the rotating EU helm, the European Commission that runs the bloc's day-to-day affairs said it was checking whether a controversial media law and recent "crisis" tax complied with EU rules.
The 27-nation bloc had "doubts" the press law stood up to media freedom standards and demanded further explanation, Commission spokesman Olivier Bailly said.
Though inquiries were at an early stage with no threat of punitive action on the table, a Commission vice-president, Neelie Kroes, voiced "concerns" and asked for "clarification" in a Christmas Eve note to Budapest.
"I look forward to receiving your notification in the coming days," the spokesman quoted Kroes as saying.
She expressed special concern over the powerful new media regulator set up by centre-right Prime Minister Viktor Orban, made up of five members of his Fidesz party.
The letter voiced her "doubts on the new media authority's capacity to act with independence, notably given its composition", the spokesman said.
The watchdog body, known as the NMHH, is to regulate media content and impose fines when rules are not respected.
Hungary's rocky start at the EU helm -- a rare occurrence -- comes amid daunting challenges for the bloc: the eurozone debt crisis, the integration of the Roma minority and tough negotiations over the EU's long-term budget.
And the press law has sparked fierce criticism at home and abroad.
Two major Hungarian newspapers on Monday plastered their front pages with the words, "The freedom of the press in Hungary comes to an end". In solidarity, German daily Tageszeitung published the same front page protest.
In an initial response to EU concerns, Hungarian authorities said the legislation "in their eyes did not violate EU laws and that a more detailed response would be forthcoming as soon as possible", the spokesman added.
The matter may be broached Friday when the entire European Commission travels to Budapest to meet the government, Bailly added.
NMHH fines for content considered offensive, and material that "is not politically balanced", can fetch up to 200 million forint (720,000 euros, 950,000 dollars) for radio and television.
The body also has the right to inspect media equipment and documents and to force journalists to reveal sources on issues related to national security.
Turning to Hungary's recently-imposed "crisis" tax, which has angered a number of major European firms, the Commission said it was investigating whether that too was in compliance with the bloc's regulations.
The Commission, which has been asked by 13 leading companies to sanction Hungary over the tax, launched an inquiry on the matter on December 20, Bailly said.
The new tax was introduced in October on the telecommunications, energy and retail sectors for a three-year period as a way of helping replenish state coffers and bring down the public deficit.
But in a five-page letter sent on December 15 to European Commission President Jose Manuel Barroso, the heads of 13 European firms accused Hungary of imposing exceptional taxes.
Among them were energy groups including Germany's RWE and E.on, Czech firm CEZ and Austria's OMV, as well as Dutch financial groups ING and Aegon, French insurance giant AXA and Germany's Deutsche Telekom.