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Hungary faces ruin as EU loses patience
The Telegraph ^ | 1/17/2012 | Ambrose Evans-Pritchard

Posted on 01/17/2012 4:05:07 PM PST by bruinbirdman

European Commission has launched legal action against Hungary's Fidesz government for violations of European Union treaty law and erosion of democracy, marking a dramatic escalation in the war of words with the EU's enfant terrible.

Hungary's defiant premier Viktor Orbán has no hope of securing vital funding from the EU and the International Monetary Fund until the dispute is resolved, leaving him a stark choice of either bowing to EU demands or letting his country slide into bankruptcy.

Yields on Hungary's two-year debt jumped to 9.17pc on Tuesday, an unsustainable level for an economy in recession with public debt of near 80pc of GDP. Hungary's debt was cut to junk status by rating agencies last week.

Capital Economics said Hungary must repay €5.9bn (£4.9bn) in EU-IMF loans and raise external funds equal to 18pc of GDP this year, the highest in Eastern Europe. Two-thirds of household debt is in Swiss francs, leading to a lethal currency mismatch as capital flight weakens the forint.

"Hungary is playing with fire," said Lars Christensen from Danske Bank. "The EU is not bluffing. It will let Hungary go over the edge to make the point that EU countries must play by the rules. Our worry is that Hungary's government has not yet got the message."

The EU said it had sent three letters of "Formal Notice" over Hungary's assault on the independence of the judiciary, the central bank, and the data protection ombudsman – the first step in "infringement proceedings". The dispute could ultimately lead to loss of Hungary's voting rights under Article 7 of EU treaty law.

"We'll use all our powers to make sure that Hungary complies with the rules of the EU," said European Commission president Jose Manuel Barroso.

Mr Orbán said his country was the victim

(Excerpt) Read more at telegraph.co.uk ...


TOPICS: Business/Economy; Crime/Corruption; Foreign Affairs; News/Current Events
KEYWORDS: eucrisis; hungary

1 posted on 01/17/2012 4:05:11 PM PST by bruinbirdman
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To: bruinbirdman
European Commission has launched legal action against Hungary's Fidesz government for violations of European Union treaty law and erosion of democracy

Yet the EU seems content with the unelected prime ministers in Greece and Italy they installed.

2 posted on 01/17/2012 4:10:08 PM PST by Vince Ferrer
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To: Vince Ferrer

Key word - “they”.

The EU wants to be the modern day emperor.


3 posted on 01/17/2012 4:13:13 PM PST by BenKenobi
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To: bruinbirdman
(Yawn) Another day another broke country.

Isn't there something that 0bama can do to help them?

4 posted on 01/17/2012 4:16:01 PM PST by EGPWS (Trust in God, question everyone else)
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To: bruinbirdman
the judiciary, the central bank, and the data protection ombudsman

There's the EU thugs overriding Hungarian sovereignty. It must be so great being in the EU.

5 posted on 01/17/2012 4:22:49 PM PST by Track9 (There IS revolution brewing..)
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To: bruinbirdman

What are they going to do, send an army in there?


6 posted on 01/17/2012 4:24:13 PM PST by political1 (Love your neighbors)
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To: Track9
It must be so great being in the EU.

Yes. You cannot even pick your own data protection ombudsman (whatever that is).

7 posted on 01/17/2012 4:31:26 PM PST by Leaning Right (Why am I carrying this lantern? you ask. I am looking for the next Reagan.)
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To: BenKenobi

yep


8 posted on 01/17/2012 4:46:31 PM PST by F15Eagle (1 John 5:4-5, 4:15, 5:13; John 3:17-18, 6:69, 11:25, 14:6, 20:31; Rom10:8-11; 1 Tim 2:5; Titus 3:4-5)
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To: Leaning Right
When you submit to being ruled by unelected technocrats and politicians who write 300 page constitutions with the words the State shall appearing multiple times on every page, it's not surprising they invented Naziism and Communism. Europe never broke free of the Feudalism that justifies elitist rule. And the idiot democrats want to bring this oligarchy crap here. I hope Americans have enough brains to tell them NO.
9 posted on 01/17/2012 4:52:22 PM PST by Track9 (There IS revolution brewing..)
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To: BenKenobi
"The EU wants to be the modern day emperor."

The problem with the godless EU is right there in the preamble to Hungary's constitution, life begins at conception.

yitbos

10 posted on 01/17/2012 4:52:49 PM PST by bruinbirdman ("Those who control language control minds." -- Ayn Rand)
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To: political1

“What are they going to do, send an army in there?”

56 years ago, the Soviets sent tanks in because Hungary didn’t ‘behave’. Perhaps now NATO will send tanks in because Hungary refuses to ‘behave’. It would certainly help Obama’s standing with his base, to crack down on that anti-Communist leader.


11 posted on 01/17/2012 6:46:28 PM PST by BobL ("Heartless" and "Inhumane" FReepers for Cain - we've HAD ENOUGH)
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