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Govt stands firm on levying taxes to cover European Court payment obligations

Issues

Hungary's government will not back down because of the European Commission's concerns over a constitutional amendment that mandates the state to levy targeted taxes to cover any payment obligations resulting from rulings by the European Court of Justice, Prime Minister Viktor Orbán said on public radio on Friday.
    Orbán said the government would continue to defend the measure, even before the European Court. The point is "to prevent such a situation in which complying with international developments – let's say a judgment against Hungary or a ruling on the recovery of funds - means raising the budget deficit", he explained.
    European Commission President Jose Manuel Barroso expressed "serious concerns" over the amendment, and others, in a letter to Orban a week ago. EC Vice-President Viviane Reding said in an address to the European Parliament on Wednesday that the amendment, "which would introduce an ad-hoc tax on Hungarian citizens should Hungary be fined for breach of EU law", would violate EU rules.
    "Now the question is, is this really sensible to make citizens pay for a tax whenever the state would fail to be in compliance with EU law? In practice citizens would be penalised twice: once for not having their rights upheld under EU law and second for having to pay for this," Ms Reding said.
    "This could undermine the authority of the Court of Justice and could constitute a violation of the duty of sincere cooperation which is inscribed in Article 4 (3) of the Treaty on the European Union on the part of Hungary," she added.

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