Brussels launches legal action against Hungary over controversial 'sovereignty law'

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The legislation, spearheaded by Viktor Orbán's ruling party and approved by the parliament in mid-December, empowers the state to investigate people and organisations suspected of undermining the country's sovereignty, with potential convictions of up to three years in prison.

Orbán, who frequently lambastes his critics as agents paid for by Western entities, says the law is necessary to protect Hungary from undue political interference.

The bill's implementation rests on the newly established "Office for the Defence of Sovereignty," which can collect information on individuals or groups that receive foreign funding and are perceived to influence the country's political debate and electoral processes. Hungary's secret services are compelled to assist the authority.

The provisions of the law, particularly its broad-yet-vague mandate and lack of judicial oversight, have raised serious concerns from civil society and independent journalists, who fear they will be unfairly targeted for refusing to follow Orbán's political dogma and be powerless to contest the decisions taken by the "sovereignty office."

The European Commission echoed these considerations and said on Wednesday that the law violates a wide range of fundamental values and legal guarantees, such as the principle of democracy, the right to private life, the protection of personal data, freedom of expression, information and association, and the right to a fair trial, among others.

The United States had previously criticised the law, decrying its "draconian tools that can be used to intimidate and punish those with views not shared by the ruling party."

Hungary has two months to reply to the Commission's objections. The letter of formal notice is the first step under the infringement procedure, which can lead to a lawsuit and daily fines before the European Court of Justice.

Zoltan Kovacs, a spokesperson of Orbán's government, reacted furiously to the news and said the legal action had been launched to protect George Soros, the Hungarian-born billionaire and founder of the Open Society Foundations.

The new clash between Brussels and Budapest comes mere days after a high-stakes summit that saw Orbán lift his veto on a €50-billion special fund for Ukraine, following a pressure campaign from his fellow leaders and the European Parliament.

As part of the negotiations that preceded the summit, Orbán had demanded the immediate release of the roughly €21 billion in recovery and cohesion funds that the European Commission has withheld over persistent rule-of-law deficiencies inside Hungary. The executive, however, insists that no cash will be unlocked until the country fulfils a series of "milestones" and conditions to address the situation.

This story has been updated with more information.