The European Union on Tuesday is expected to announce legal action against Hungary because of government measures that critics say move the country toward dictatorship. But, the EU anticipated measure is fueling far right calls for Hungary to leave the European Union.
Officials of a Hungarian far-right political party known for its perceived anti-Semitic rhetoric and threats against Gypsies, or Roma, recently burned a European Union flag at a rally in front of the European Union offices in Budapest.
Up to 2,000 demonstrators demanded that the country withdraw from the EU during a protest of the Movement for a Better Hungary party, or Jobbik. Some wore uniforms and others waved flags of Hungary's pro-Nazi regime during World War II.
Shouting anti-EU slogans and "Ria, Ria, Hungaria," demonstrators compared the EU with the Soviet occupation of Hungary decades ago.
Saturday's demonstration came after the European Commission, the EU's executive arm, said Hungary would face legal action as early as Tuesday unless it modifies a series of economic and legislative measures that critics say have moved the country toward dictatorship.
The European commissioner for economic and monetary affairs, Olli Rehn, says Hungary has not done enough to keep its budget deficits within European Union limits. There is concern that Hungary's center-right government has been balancing its books by imposing a tax on predominantly foreign companies, while nationalizing private pensions.
Rehn says these actions do not translate into a permanent improvement in Hungary's budget and that the European Commission might suspend massive subsidies destined for Budapest.
"It could, nevertheless, face a suspension of commitments from the cohesion fund from next year from January 2013 onwards," said Rehn. "In the absence of [a budgetary] correction from Hungary, I will coordinate any further step in that direction."
That could cost Hungary as much $1.5 billion a year in EU subsidies. The European Commission has also expressed concern about the perceived autocratic style of Prime Minister Viktor Orban and his Fidesz political party. They used their two-thirds parliamentary majority to adopt a constitution and related laws that critics say move this once communist nation toward dictatorship.
European Commission Spokeswoman, Pia Ahrenkilde Hansen:
"The concerns relate to a number of issues, including the independence of the national central bank, the measures concerning the judiciary and particular mandatory early retirement of judges and prosecutors at the age of 62 instead of 70, and finally, the independence of the national data protection authority," said Hansen.
The Hungarian government says it is “committed to universal European values” and that it is “ready for negotiations and to find solutions” with the European Commission about its concerns.
But Prime Minister Orban says differences remain on issues such as the independence of Hungary's central bank and that he will listen to "arguments, not political opinions."
Analysts say his comments are meant to win voters from the far-right Jobbik party - the second largest political force in Hungary.
Jobbik leader Gabor Vona recently told reporters that there is an EU attack against Hungary.
"What the Hungarian government got from Brussels and the European Commission is not a little knock or a smack, but a kick in the head, while Hungarians are on the ground," said Vona.
At the other side of the debate are moderate Hungarians who welcome the EU's pressure. Among them are television reporter Aranka Szavuly and her supporters who are camped outside the headquarters of state-run Hungarian television.
Szavuly says they are particularly concerned about legislation and other measures that allow government allies to influence the content of news programs.
"We kept a hunger strike in front of the building of the television because in the past few months and weeks, there were lot's of stories when the staff was manipulating the news," said Szavuly. "And we all knew that was not right."
Szavuly and fellow TV journalist Balazs Nagy Navarro recently were fired for participating in the hunger strike. And a Budapest radio station, Klubradio, which has been critical of the government, faces closure because authorities say its license will not be renewed.
Navarro says his struggle goes beyond party politics and that in the two decades since the collapse of communism, the real issue is how to preserve press freedom and other democratic values for future generations.
"We are at a crossroads and I think we still have time to restore democracy, which is threatened; restore constitutionality, which is threatened by the new basic law which is an odd constitution," said Navarro. "We should stop this because when somebody has a two-thirds majority, they think they can do whatever [they want]."
Analysts say there might not be much time left as Hungary seeks as much as $26 billion in financial assistance from the International Monetary Fund and the European Union. The IMF has told Hungary's chief negotiator that talks about the country's request will resume only if the country changes contested legislation.