Hungary takes over EU presidency

Hungary took the helm of the European Union on Saturday even as a new law which sparked concern about media freedom in the country came into force in the teeth of fierce opposition. The challenges currently facing the 27-nation bloc are daunting enough: the eurozone debt crisis, the integration of the Roma minority, and tough negotiations over the EU's long-term budget.
But - as the German government put it recently - Hungary "will have a particular responsibility for the image of the whole union in the world" as it raises hackles both at home and abroad with a series of controversial reforms. Prime Minister Viktor Orban stormed to power in April when his centre-right Fidesz party won an unprecedented two-thirds parliamentary majority, giving him power to change laws and even the constitution more or less at will.
The 47-year-old quickly installed his own allies in almost all of the key positions of power in the country, including the president, Pal Schmitt. Hungary narrowly escaped bankruptcy in late 2008 thanks to a 20-billion-euro bailout by the EU and the International Monetary Fund. In return, Budapest pledged to bring down its deficit from more than 9.0 percent of gross domestic product in 2006 to below 3.0 percent in 2011. The problem for Orban is that he was voted in on his promises to cut taxes, so he has to find other ways of plugging the hole in the public finances.
In order to do so, he has ordered the nationalisation of the assets of Hungary's private pension funds and levied so-called "crisis" taxes on sectors such as the banking, telecommunications, energy and retail sectors, measures which both the EU and the IMF insist are much too short-term in nature. But it is above all a far-reaching media reform which has raised questions about Hungary's suitability to hold the rotating EU presidency for the next six months.
As part of the changes, a new watchdog will be set up to regulate media content and impose fines when rules are not respected. The authority will be headed by members of Orban's Fidesz party and will have the right to inspect media equipment and documents and to force journalists to reveal sources on issues related to national security. The Organisation for Security and Co-operation in Europe has slammed the law as a danger to press freedom and the European Parliament and countries such as Germany have also been openly critical.