The European Commission said in late March that it had launched an infringement procedure against Hungary to investigate the countryʼs investor restrictions on farmland.
The EC has asked Hungary to submit observations on the law regulating farmland purchases in a “letter of formal notice”, a step that is the first stage of the infringement process. The EC said provisions in the law “may be considered to restrict the free movement of capital and freedom of establishment”, according to EU law.
It noted that any restrictions on these basic freedoms must “be justified and comply with the principles of non-discrimination and proportionality”, adding that “while Member States are permitted to set their own rules to promote rural development, to keep land in agricultural use and avoid speculative pressure on land prices, this must be done within the limits of EU law.”
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