The European Commission (EC) is suing the Hungarian government in the EU Court due to an escalating dispute with Budapest over the retail tax, bb.lv reports citing FT.
The European Commission is this week filing a lawsuit against the Hungarian government in the EU Court. The reason is the protracted conflict over the retail tax. This move coincides with the moment when future Prime Minister Peter Madjar, who will take office in May, is trying to mend relations with Brussels. The situation is reported by the Financial Times (FT) citing sources.
According to FT, the EC will "refer the issue of the Hungarian retail tax to the European court." There remain unresolved legal claims against laws enacted under outgoing Prime Minister Viktor Orban.
Major retailers have long complained: this tax "effectively destroys their profits." Among the dissatisfied is the Austrian company Spar. It accused the Hungarian authorities of violating EU legislation, the publication states. "Taking legal action regarding the retail tax regime in Hungary would be a key step in combating illegal restrictions in retail," said FT CEO of Spar Hans K. Reisch. "Discriminatory restrictions in retail in Hungary, such as this tax, result in losses for us."
After the victory of the Tisza party in the parliamentary elections, the European Commission handed a list of 27 points to the movement's leader, Peter Madjar. It outlines steps to strengthen democracy and the rule of law. Without their implementation, Hungary will not gain access to frozen funds from the EU budget and special funds. Madjar promised to meet the requirements as soon as possible. He will be elected Prime Minister at the first session of the new parliament on May 9. He has already named candidates for key positions in the government.
The European Commission's lawsuit against Hungary is not just a dispute over tax but another episode in the long-standing conflict between Budapest and Brussels over the rules of the game and compliance with EU norms. The decision to refer the case to the EU Court signals that the patience of European institutions is running out, and legal pressure will only increase.
For future Prime Minister Peter Madjar, the situation becomes a test of political viability. On one hand, there is the need to quickly normalize relations with the EU and unblock funding; on the other, there is the legacy of previous policies that have already become the subject of legal disputes, writes bb.lv.
