Hungary Amends Constitution as EU Monitors Backsliding

Hungarian Prime Minister Viktor Orban’s lawmakers backed a constitutional amendment to curtail judicial authority, setting up a showdown with European Union nations seeking to sanction members that violate basic values.

The amendment overturns some court decisions and limits legal interpretation by judges, provisions previously shot down by the Constitutional Court. The Budapest-based parliament, where Orban has a two-thirds majority, passed the changes by 265 votes to 11.

The move comes after the foreign ministers of Germany, Denmark, Finland and the Netherlands pushed to impose EU funding cuts on member states that violate the 27-nation bloc’s democratic values, in a March 6 letter to European Commission President Jose Barroso. Barroso told Orban March 8 that parts of his amendment may breach EU law, the MTI news service said, citing Pia Ahrenkilde-Hansen, a commission spokeswoman.

While some EU states may run afoul of EU rules ranging from competition to telecommunications, “Hungary is different because its violations are on much more substantive issues that are about the principles of a constitution-based democracy,” Fredrik Erixon, head of the European Centre for International Political Economy in Brussels, said by phone. “That’s what people in Brussels and the commission are arguing.”

Forint Plunges

Central bank President Gyorgy Matolcsy, appointed last week, on March 8 stripped deputies elected by his predecessor of their strategic responsibilities. The forint has since dropped 1 percent, the most among 25 emerging-market currencies tracked by Bloomberg, to 301.85 per euro.

The European Union voiced concern about the impartial administration of justice in Hungary after the passage of the amendment.

“These amendments raise concerns with respect to the principle of the rule of law,” Barroso said in a joint statement from Brussels with Thorbjoern Jagland, secretary general of the Council of Europe.

The statement called on Hungary to work with European institutions to address concerns regarding “the compatibility of these amendments with European principles and EU law.”

Vote Boycott

The biggest opposition party, the Socialists, boycotted today’s parliamentary session in protest at the amendments, state news agency MTI reported, citing party leader Attila Mesterhazy. Jobbik, the radical nationalist opposition party, planned to abstain from the ballot, Vice President Zoltan Balczo said today, according to MTI.

The government’s anti-terror unit closed the square in front of President Janos Ader’s offices until at least March 16 as a safety measure, MTI reported, citing a statement on the unit’s website. Protesters had planned to gather today at Ader’s headquarters to call on him to refuse to sign the amendments into law, according to MTI.

Orban has asserted his influence over independent institutions since winning elections in 2010, drawing criticism from the EU, the U.S. and the United Nations. His lawmakers passed a new constitution over opposition protests, ousted the chief justice of the Supreme Court and set up a media regulator led by ruling-party appointees.

Overruling Court

Today’s amendment includes limiting campaign ads in private media, restricting the definition of a family to marriage and allowing the criminalization of homeless people who live on the streets, all of which the Constitutional Court has vetoed in past decisions. It would also bar justices from citing rulings made before the new constitution.

“This gives the impression that the government is willing to use the two-thirds parliamentary majority to overrule the Constitutional Court, which might endanger the fundamental principle of checks and balances in a democracy,” Thorbjoern Jagland, secretary-general of the Council of Europe, an inter-governmental organization that promotes democratic values, said March 6.

The amendment “could threaten the principles of institutional independence and checks and balances that are the hallmark of democratic governance,” U.S. State Department spokeswoman Victoria Nuland said March 7.

‘Full Commitment’

Orban pledged “full commitment” to “European norms and rules” in approving the amendment, according to a March 8 letter to Barroso. Criticism is “fueled by misunderstandings and inadequate information,” Foreign Minister Janos Martonyi wrote the same day in a letter to EU counterparts.

The European Commission will assess the legislation after the vote and weigh its next steps, Pia Ahrenkilde Hansen, a commission spokeswoman, told a daily press briefing today in Brussels.

Orban’s letter “contains general reassurances that Hungary is committed to respecting both EU values and EU law,” she said. “That’s obviously, as such, very positive. You know there are very specific concerns.”

Orban, who’s relying on EU funds to help end a recession before 2014 elections, came into office in 2010 with plans to widen the budget deficit. He ended up keeping the shortfall below 3 percent of output in the last two years and his priority this year is to exit the EU’s excessive-deficit procedure to remove the threat of aid cuts.

‘Targeted Instruments’

Four EU members, including Germany, are urging that financial penalties are also imposed for breaching basic values, citing the absence of “sufficiently targeted instruments” to enforce democratic norms, the foreign ministers said in a letter to Barroso, a copy of which was obtained by Bloomberg News.

“Europe is a community of values and it’s as important that these values are lived within national borders,” German Foreign Minister Guido Westerwelle said today in Brussels.

Orban’s consolidation of power has failed to mobilize the Hungarian public en masse, even as he’s often able to draw hundreds of thousands to street protests. His Fidesz party has widened its lead over the opposition, leading the Socialists by 26 percent to 12 percent in a Feb. 15-19 Median poll that had a 2.5 percentage points margin of error.

“I don’t know why Hungarians are so insensitive to these changes -- I guess something’s missing from society’s immune system,” Istvan Toth, 44, said at a March 9 protest. “The average person probably doesn’t understand how these changes will impact his everyday life.”