Friday

16th Apr 2021

Leading firms seek sanctions against 'EU president' Hungary

  • Budapest: complaints about a media gag and unfair taxes have cast a shadow over the start of Hungary's EU presidency (Photo: www.spotmob.com)

Thirteen European companies have written a joint letter to the EU commission asking for sanctions against Hungary over a set of special taxes imposed on foreign investors. The row comes just as Budapest takes over the rotating EU presidency and comes on top of an existing controversy over its strict media law.

The five-page letter addressed to EU commission chief Jose Manuel Barroso called on Brussels to "convince the Hungarian government of the importance of having stable legal conditions for investors" and of "making Budapest withdraw its unfair taxes," the Sunday (2 January) edition of Germany's Die Welt newspaper reported.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

The signatories include the heads of Germany's energy giants RWE and E.ON, Deutsche Telekom, German insurer Allianz, the Dutch ING bank, French insurance firm Axa, Czech energy company CEZ and Austria's energy champion OMV, all of which have threaten to withdraw their investments from the central European country.

The letter, dated 15 December, says that Deutsche Telekom alone stands to lose up to €100 million euro as a result of recently-imposed retroactive taxes on foreign investors designed to reduce Hungary's public deficit. According to the company chiefs, the new taxes could yield €1.3 billion for cash-strapped Budapest.

Speaking to Sueddeutsche Zeitung, German economy minister Rainer Bruederle said it was "fundamentally problematic for the EU internal market" that an EU country should harvest funds in this way from foreign companies. Berlin has already raised these concerns with the Hungarian government and will "follow this issue closely also through the EU commission," he added.

If the commission decides that Hungary is in breach of EU law, it may refer the case to the European Court of Justice.

The court has the power to oblige EU countries to change their laws and to levy fines. The process - known as "infringement procedure" - is lengthy and can be halted at any time if the Hungarian government falls into line voluntarily.

The tax row, with its implication of un-European behaviour, will contribute to the unpleasant atmosphere at the start of Hungary's EU presidency.

Budapest took over the rotating office on 1 January amid widespread criticism of a new media law which gives greater powers to a media council to sanction broadcasters for publishing material that is "not politically balanced" or offends "human dignity."

Under the headline "The Putinisation of Hungary," in reference to Russia's authoritarian Prime Minister Vladimir Putin, the leading US newspaper, the Washington Post, ran an editorial on 26 December saying that the EU may be "regretting" its rotating presidency system.

"That's because the gavel will be handed to Hungary, whose populist and power-hungry government has just adopted a media law more suited to an authoritarian regime than to a Western democracy," it said.

Meanwhile, US rapper Ice-T has become the subject of the first case handled by the new media body after his explicitly-worded songs were broadcast before 9pm by a local radio station.

"I love it! The world still fears me. hahaha!" he posted on his Twitter account.

Luxembourg tax scandal may prompt EU action

An investigation into Luxembourg's tax regime has uncovered how the Italian mafia, the Russian underworld, and billionaires attempt to stash away their wealth. The European Commission has put itself on standby amid suggestions changes to EU law may be needed.

Investigation

Portugal vs Germany clash on EU corporate tax avoidance

Portugal's taking over the EU presidency puts the tax transparency law for corporations - which has been fought over for years - to a vote in the Council of Ministers. The resistance of the German government has failed.

News in Brief

  1. EU postpones decision on labelling gas 'sustainable'
  2. MEPs call for mass surveillance ban in EU public spaces
  3. Greek and Turkish ministers trade jibes in Ankara
  4. Biden repeats opposition to Russia-Germany pipeline
  5. Navalny in danger, letter warns EU foreign ministers
  6. Lithuania keen to use Denmark's AstraZeneca vaccines
  7. Gas plants largest source of power-sector emissions
  8. Study: Higher risk of blood clots from Covid than vaccines

Vietnam jails journalist critical of EU trade deal

A journalist who had demanded the EU postpone its trade deal with Vietnam until human rights improved has been sentenced to 15 years in jail. The EU Commission says it first needs to conduct a detailed analysis before responding.

Stakeholders' Highlights

  1. Nordic Council of MinistersDigitalisation can help us pick up the green pace
  2. Nordic Council of MinistersCOVID19 is a wake-up call in the fight against antibiotic resistance
  3. Nordic Council of MinistersThe Nordic Region can and should play a leading role in Europe’s digital development
  4. Nordic Council of MinistersNordic Council to host EU webinars on energy, digitalisation and antibiotic resistance
  5. UNESDAEU Code of Conduct can showcase PPPs delivering healthier more sustainable society
  6. Nordic Council of MinistersWomen benefit in the digitalised labour market

Latest News

  1. US rejects Slovenia-linked plan to break up Bosnia
  2. Ukraine urges Borrell to visit Russia front line
  3. Could US sanctions hit Russia vaccine sales to EU?
  4. Polish court pushes out critical ombudsman
  5. Political crises in Romania and Bulgaria amid third wave
  6. Von der Leyen's summer plans undisclosed, after Ukraine snub
  7. Over a million EU citizens back farm-animal cage ban
  8. Three options for West on Putin's Ukraine build-up

Join EUobserver

Support quality EU news

Join us