EC decides to start talks with Hungary on precautionary financial assistance

EU

The European Commission on Wednesday said Hungary had taken sufficient action and commitments to start talks on precautionary financial assistance it is seeking from the European Union.

"The Commission has today assessed that Hungary has taken sufficient action and commitments to enter into negotiations on precautionary balance of payment assistance," the body said in a statement.

"This decision has been taken in light of commitments by Hungary, confirmed by PM Orbán yesterday after his meeting with President Barroso, to take tangible steps to ensure compliance with EU law on all the issues that are relevant for the stable and independent legal environment that lies at the heart of the investors' confidence and influences macroeconomic stability," it added.

The Commission said it agreed at a meeting on Wednesday to close an infringement case on the independence of Hungary's central bank once the relevant legislation is adopted. It added that Hungarian authorities have committed to continue consultations with the European Central Bank in view of finding an agreement on the remaining open issues.

Hungary has also committed to address promptly and fully the recommendations of the Venice Commission on key priority areas in the field of the judiciary reform, the Commission said.

"Before the negotiations can be concluded, the Commission expects that the commitments are fully implemented," it added.

The forint firmed sharply against the euro from 291.67 to 289.08 after the decision was announced.

The Commission decided early in March to continue accelerated infringement procedures on the independence of the country's data protection authority and measures affecting the judiciary, and to ask for additional information on the central bank's independence.

Speaking at a scheduled press briefing after the Commission took the decision, Commission spokesman Olivier Bailly said "some improvement" had been noted on the issue of the independence of the data protection authority, but the Commission would still bring the matter to the Court of Justice. He added that the matter of lowering the retirement age of judges would also be examined by the Court of Justice on the basis of urgent procedure. He said Hungary would be asked to refrain from implementing the law until the court takes a decision on the matter.

 

"Guarantees have been provided by the Hungarian authorities vis-a-vis the independence of the central bank. Assurances have also been provided in accordance with the Venice Commission work on the independence of the judiciary, which means the Commission is today prepared to discuss financial assistance as requested by Hungary from the EU and the IMF last November," Bailly said.

 

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