The European Union has stepped up pressure on Hungary over the country's refusal to implement austerity policies and threatened legal action over its new constitution. The pressure was met with a furious demonstration on 22 January in the capital, Budapest, that drew more than 100,000 people in support of the government, according to news reports.
The threats of legal action from the European Commission are escalating the stand-off between Budapest and the European Union, as Hungary negotiates fresh financial aid from Europe and the International Monetary Fund.
Over the past months, the country's credit rating has been cut to junk by all three major rating agencies, unemployment is 10.6 per cent and the country may be facing a recession.
But bailout negotiations between Hungary and the European Union/International Monetary Fund broke down after the Hungarian government refused to cut public spending and Hungarian lawmakers implemented a new constitution reasserting political control over its central bank. European treaties demand that central banks remain independent of governments. ■