Hungary to Assume EU Presidency Under Criticism

Government warned against new legal, economic actions

Just as it is about to take over the presidency of the European Union (EU), Hungary is fielding critics from other nations in the bloc for its actions in consolidating power under Prime Minister Viktor Orban and his Fidesz party.

Budapest has passed a new law tightening controls on media. Signed on Thursday, the legislation establishes a new national media authority that will, according to a Reuters report, oversee all public news production and be able to impose large fines on private media. The authority, says the report, is filled with officials loyal to Fidesz, and is seen by other nations in the EU as a potential distraction in the ongoing debt crisis, as well as an obstacle in the EU’s effort to advocate freedom of the press to other nations.

Orban has also gotten backing from the Hungarian parliament to seize up to $14 billion in private pension assets; this is intended to cut the deficit. When he took power less than a year ago, he also announced that he would not extend a 20 billion euro loan arrangement with the EU and the International Monetary Fund (IMF) that had helped Hungary ward off financial catastrophe in 2008.

Last but not least, Orban’s government is working on changing a law that determines the appointment of members of its central bank’s monetary policy council. This is seen as an attempt to force the bank into monetary easing; it has been criticized by the European Central Bank (ECB), and has also led to investors pricing in the risk it involves.

While Hungary will only hold the top post at the EU for six months, it will preside over some very critical talks on the EU’s budget for 2014-2020, in which countries like Germany, France and Britain will face off against poorer central and eastern European nations.

While Hungary’s policies at home are of course no guarantee of disaster for the EU, Luxembourg’s foreign minister questioned last week whether Hungary was “worthy” to take the helm. Germany has pressed Budapest to resolve issues surrounding its new media law “quickly” and the British Foreign Office has urged it to reconsider.

Hungary may not have the drafting of major decisions within the EU, but it will be presiding over a number of important meetings, including finance.

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