The government maintains that the law which came into force on May 1, 2014 protects the interests of local farmers against those of speculators, limiting the availability of land for foreigners to purchase and offers Hungarian farms a chance to grow.

The first procedure was launched at Austria’s initiative, because Hungary changed land-use rights, while the second launched by the European Commission concerns the legislation as a whole. Both cases could be elevated to the European Court of Justice, the state secretary noted. Austria has objected to the law which it says strips Austrian farmers of their rights to benefit from Hungarian farmland. Last year, Hungary’s farm minister labelled Austria’s decision to approach Brussels an “unfriendly step”.

Brussels regards curbs on land sales to people from other EU countries as a restriction of free movement of capital, one of the fundamental freedoms of the EU single market, though it has also said that in certain cases restrictions to these freedoms can be accepted if they are “proportionate, justified and serve the general interest”.

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