Hungary May Face Sanctions Imposed By European Commission

Hungary may face European sanctions after 13 major European firms demanded the political bodies of the EU to impose sanctions for policies that are construed as a crackdown on foreign investors and as a anti-competitive measures.

The demands come at a time when Hungary took over the rotating presidency of the European Union.

Hungary celebrated the taking of presidency in the Millenium Park in Budapest, the capital of the state, on New Year’s Day, in a spectacle of light and music.

However, the foreign investors do not seem to share in the joy of the Hungarians, complaining about the new tax policies of the center right government in Budapest.

The multinational companies have petitioned the European Commission to put pressure on Hungary to ease the financial pressure on some foreign investing companies and certain industries the Hungarian government taxes in order to balance the budget.

Among the companies that complained are RWE, E.on, OMV, AXA, Deutsche Telecom, ING or Aegon.

The main concern of these firms refers to the crisis tax, which targets banks, energy, telecommunication and retail companies.

The companies are upset about the fact that the crisis tax was not agreed with them when they decided to invest in Hungary.

Hungarian Prime Minister Viktor Orban defends the measures he took by saying that it is normal that the companies share in the profit and the crisis times, and that the fate of the firms operating in Hungary must be connected to the one of the country itself.

Orban adds that the European Commission has no right to interfere in this matter, a position that is not shared by the politicians in Brussels who already said that they were looking into the firms’ complaints and that sanctions may be ruled against the government in Budapest.

The spokesman for the European Commission said that while the EC has no interest in interfering in the internal fiscal policies of the member states, there is however a principle of equality that must be observed, and that the ignoring of this principle may trigger sanctions against Hungary.

He explains that it is not possible to tax an economic operator different than another operating in the same economic field.

The sanctions may refer to financial penalties, cutting of European funds for Hungary, and even the stripping of Hungary of the right to vote within the Union.

Similar procedures have been launched against France and Spain also.

Hungary has also passed a restrictive law for media, which makes it possible that a broadcaster be fined with $1 million or  a website administrator to receive a fine of $100,000 if their coverage is considered biased or immoral.