The Commission has decided to start the second stage under EU infringement proceedings – to send Hungary two reasoned opinions, and two administrative letters, after which the matter may be referred to the Court of Justice of the European Union. The Commission still has concerns about measures affecting the judiciary and the independence of the country’s data protection supervisor. In addition, the Commission requested in a recommendation a Council recommendation asking Hungary to take steps to correct its excessive deficit in a sustainable and credible manner by 2012.

The European Commission has decided to send Hungary two reasoned opinions and two administrative letters under EU infringement proceedings, following Hungary’s reply to three letters of formal notice of 17 January and their legal analysis. The reasoned opinions concern the independence of the data protection authority and measures regarding the retirement age of judges – which would lead to the anticipated retirement of 274 judges and public prosecutors. The two administrative letters are seeking further clarifications regarding the independence of the judiciary and the independence of the central bank.

Hungary needs now to flesh out these commitments and provide evidence through new legislation, according to the Commission. Hungary also needs to provide additional commitments and further clarifications. Depending on this additional evidence and information, the Commission will decide the next steps. In addition, the Commission has accelerated the deadline for Hungary to respond to the reasoned opinions and administrative letters to one month instead of the normal two-month period, due to the urgency of the matter (the various laws in question are already in force).

On the other hand, the Commission adopted a recommendation for a Council recommendation asking Hungary to take steps to correct its excessive deficit in a sustainable and credible manner by 2012. The Council already warned last January that Hungary has failed to correct excessive deficit. Hungary therefore would be asked for an additional fiscal effort to attain the government's own deficit target of 2.5% of GDP in 2012 and to ensure that the deficit in 2013 remains well below the 3% threshold also after the phasing out of one-off measures. Moreover, the European Commission has authorised, under EU state aid rules, an extension until 30 June 2012 of a Hungarian liquidity scheme for credit institutions.