Step up the pressure

5 January 2011 By Pierre Briancon

Budapest is taxing foreign firms, suppressing the central bank s independence and clamping down on the media. It s a big embarrassment for Europe just as Hungary takes over the EU chairmanship. If Hungary doesn t change tack, it may discover that populism often leads to poverty.

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Neelie Kroes, the European Commissioner responsible for media, has received the text of the new Hungarian law restricting press freedom and will discuss it when she visits Hungary on Jan. 6, EU officials said Wednesday.

Rainer Bruederle, the German economics minister, said earlier this week that Berlin had made it clear to the Hungarian government that it was concerned about new taxes that would hit foreign firms especially hard.

"Taxes that are primarily directed at foreign companies are problematic in principle in the European internal market," Bruederle told Germany's Suddeutsche Zeitung.

Reuters reported in December that a group of 15 companies, including major German and Austrian energy and financial firms, wrote a joint letter to the European Commission to protest the tax move by Hungary, which this month took over the EU's rotating presidency.

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