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EU pursues Hungary over foreign ownership land law

16 October 2014, 19:11 CET
EU pursues Hungary over foreign ownership land law

Viktor Orban - Photo EU Council

(BRUSSELS) - The EU launched legal action against Hungary on Thursday arguing that a ban on foreign ownership of land pushed through by the right-wing government of Viktor Orban was illegal.

The European Commission, the bloc's executive arm, said that "Hungarian legislation has restricted the rights of cross-border investors in a way that may violate EU law on free movement of capital and freedom of establishment".

In 2012, Orban's populist government passed a law banning certain types of foreign ownership of arable land in a move intended to protect Hungarian farms from being snapped up by foreigners.

EU member states have the right to create laws limiting ownership of national land, but this must be done within the framework of bloc treaties.

Under the Hungarian law, foreign rights-holders saw their property annulled unilaterally on May 1 this year, instead of being accorded the 20-year notice period that existed previously.

This major change deprived the affected parties "of their acquired rights and of the value of their investments," the EU said.

The proceeding in Brussels is the first stage of the infringement procedure and Hungary has two months to argue its case.

In a statement, the ruling right-wing Fidesz party objected to "the latest attempt by the EU to exert pressure".

"Behind this attack lies strong business interests" who oppose a law that "favours Hungarian farmers rather than foreign speculators, family farmers rather than large landowners," it said.

The populist Orban is often criticised in Brussels over an autocratic and xenophobic style of government.


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