Fight Between Hungary and the EU Ramps Up

(CN) – A burgeoning battle between Hungary and the European Union got uglier Wednesday, as the European Commission initiated legal action over efforts to close a foreign university in Budapest and attempted to “set the record straight” on the Hungarian government’s “Stop Brussels” propaganda campaign.

Earlier this month, the commission expressed concerns over a number of actions taken by the Hungarian government so far this year. In addition to perennial problems in Hungary – discrimination against the Roma people and lack of protection for female workers – the commission said a recently adopted bill to regulate foreign universities amounts to an attempt to stifle academic freedom and thought and is really meant to shutter U.S.-based Central European University.

Additionally, the EU’s regulatory body took issue with the Hungarian government’s “Stop Brussels” initiative, saying much of the campaign is “factually incorrect or highly misleading.”

The initiative appears aimed at stoking anti-EU sentiment among Hungarians. Among the claims the commission says are false or misleading:

“Brussels wants to force us to abolish the reduction in public utility charges;”

“Brussels wants to force Hungary to let in illegal immigrants;”

“Illegal immigrants heading to Hungary are encouraged to illegal acts by not just human traffickers but also by some international organizations;”

“More and more organizations supported from abroad operate in Hungary with the aim to interfere in Hungarian internal affairs in a nontransparent manner;”

“Brussels is attacking our job-creating measures;” and

“Brussels is attacking our country because of tax cuts.”

On Wednesday, the commission – based in Brussels – refuted all six points of Hungary’s initiative in a fact sheet titled “Facts Matter.” In it, the commission noted the European Union is “a project driven and designed by its member states, each of which has decided unilaterally and democratically that this is the path they wish to adopt – including Hungary.”

The commission said the EU is fighting irregular migration and is helping member states to control their external borders. It also noted the EU has spent $23 billion to promote job growth in Hungary since it became part of the Schengen Area in 2007 and finances over half of all government capital investments there – the highest rate in the EU.

Furthermore, the commission said the setting of corporate and income tax rates is and has always been a sovereign right of member states. As for the value-added tax that all member states collect to fund the European Union, the commission noted Hungary has set its VAT rate at 27 percent, the EU’s highest.

The commission said Hungary’s decision to reduce the VAT on internet services, however, violates Hungary’s agreement at the EU level. In any event, the regulatory body said it plans to give member states more freedom on VAT rates this year, pending unanimous agreement by all 28 member states.

As for Hungary’s higher education law, the commission said the law unconstitutionally restricts the freedoms to provide services and of establishment, as well as the rights to academic freedom, an education and to conduct business – not to mention the EU’s international trade laws.

Hungarian authorities have one month to respond to the commission’s concerns before legal proceedings advance.

In a statement after Hungary passed the law earlier this month, Central European University said the law as passed makes it all but impossible for the school to remain in Hungary.

“The deadlines imposed in the final form of the legislation are even more punitive than earlier versions, and the requirement that foreign institutions like CEU receive authorization from U.S. federal authorities appears not to understand the U.S. Constitution,” the university said. “U.S. law clearly gives authority for higher education to the states. We have operated since 2004 on just such an agreement between the governor of New York and the then-prime minister of Hungary.”

University president Michael Ignatieff said the school would contest the constitutionality of the law and urged the Hungarian government to resolve the issue outside of the courts.

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