FACTBOX-Hungary's new constitution: key points

April 15 Fri Apr 15, 2011 6:57am EDT

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April 15 (Reuters) - Parliament will vote on Hungary's new constitution on Monday, launching an ambitious programme to rewrite major legislation by the end of the year.

Many important areas will be covered in separate laws requiring a two-thirds majority in parliament. Hungary has had dozens of laws which need a two-thirds majority, which often made it difficult for governments to implement change.

For a news story on the constitution vote, click on [ID:LDE73D114].

Following are some of the key changes:

CENTRAL BANK (Article 41)

The law governing the National Bank of Hungary will be elevated from simple majority to a two-third super-majority. The content of much of the new central bank law is not yet known.

The constitution leaves unchanged the six year terms of the governor and two vice-governors of the central bank. The president will appoint all three officials. To date, the governor has had the right to pick his two deputies.

DEBT CEILING (Article 36-37)

The constitution says Hungary's public debt must not exceed 50 percent of the previous year's gross domestic product (GDP) except in extraordinary circumstances or a prolonged and significant recession.

As long as debt is above 50 percent of GDP, parliament must run a budget surplus to ensure debt remains on a downwards trajectory. The constitution does not set a deadline for cutting state debt to 50 percent of GDP from 80 percent currently.

THE FISCAL COUNCIL (Article 43)

The government has reformed the Fiscal Council, which the new constitution gives strong powers to oversee the budget.

It will have a right of veto over the budget, giving it a strong say on fiscal policy. The constitution gives the president the right to dissolve parliament if it fails to pass a budget by the end of March. (Article 3)

The three members of the Fiscal Council are the Chairman (appointed by the President for 6 years), the Chairman of the State Audit Office and the Governor of the central bank. The first two have been appointed by the incumbent government.

FORINT CURRENCY (Article K)

The constitution states Hungary's legal tender is the Forint. Because the constitution requires a two-thirds majority to change, it may prove difficult for Hungary to adopt the euro currency, as the government then in power may not enjoy a two-thirds majority and would need a cross-party consensus that might be difficult to secure.

Hungary is not seen adopting the euro before 2019. HUEMUDATE1.

POINTS DISPUTED BY CIVIC GROUPS

-- The constitution stipulates that the life of the fetus should be protected from conception.

-- It defines marriage as the union of a man and a woman.

-- Some civil society groups complain the preamble of the constitution reflects Christian/nationalist thinking, rather than ideological neutrality.

CITIZENSHIP

The new constitution says Hungary should bear responsibility for the millions of Hungarians living abroad. It no longer contains a clause requiring Hungarian residency to qualify for the right to vote, although it allows the government to enact such a condition in a separate law.

Leaving out the residency requirement may allow the government to extend voting rights to all Hungarian citizens, analysts said. On taking power last year the government granted citizenship to all ethnic Hungarians who applied for it.

CONSTITUTIONAL COURT

The constitution incorporates temporary curbs on Hungary's top court enacted last year.

The court can only overrule legislation on the budget, tax and customs issues if they infringe basic rights to life and human dignity, the protection of personal data and freedom of thought, conscience and religion. (article 24)

The curb on the court's powers will be lifted once the public debt sinks below 50 percent of GDP.

APPOINTMENT CHANGES

-- The Constitutional Court will have 15 members instead of 11, elected by parliament for 12 years rather than nine years now. (Article 24)

-- A new institution, the Kuria, is established to oversee the judicial system whose chairman will be elected by Parliament for 9 years. (Article 25)

-- The Constitution confirms previous government legislation lengthening the term of the chief prosecutor to nine years from six (Article 29), and doubles the mandate of the head of the State Audit Office to 12 years (Article 42).

LOCAL GOVERNMENT

-- Local governments will be elected for five instead of four years to abolish a link to the parliamentary elections cycle. That has in the past encouraged new governments to subordinate national policy to the need to perform well in local polls (Article 35).

-- The government will be allowed to veto borrowing by local governments (Article 34). (Reporting by Marton Dunai/Sandor Peto; Editing by Jon Boyle)

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