* EU investigating Hungary's media law
* Preliminary findings show faults
* Media law casts shadow over Hungary's EU presidency
By Justyna Pawlak
BRUSSELS, Jan 17 (Reuters) - European Union telecoms chief Neelie Kroes said on Monday preliminary analysis of Hungary's new media law showed it may contravene EU laws on press freedom and broadcasting.
The two-part legislation has been denounced in capitals across Europe, with Germany, Britain and France particularly outspoken, at a sensitive time for Hungary, which has just taken over the EU's six-month rotating presidency.
The criticism by fellow EU governments and public outcry in Hungary, whose parliament enacted the media law late last year, have raised concern for its ability to build consensus in the 27-member bloc at a time when difficult economic reforms are needed.
Kroes, who is overseeing an investigation into the law by the EU's executive Commission, said it "would seem to raise a problem" under the bloc's broadcasting rules.
"My staff and I have been in touch with the Hungarian authorities over the weekend and earlier today in order to raise specific points on which the media law does not appear at first sight to be satisfactory," she said, according to text of a speech she made in the European Parliament.
Hungary says the law had to be changed because the old legislation was ineffective, with increasingly virulent tabloid television channels and newspapers acting with impunity.
But passages of the law have raised profound concern about how far Hungary may be going in its attempt to enforce tighter rules for the media world.
Kroes said she was concerned the law appeared to apply to media companies established outside of Hungary, which would contravene EU regulations that say broadcasters are subject to rules in their country of origin only.
Hungary's efforts to require broadcasters to present news in a "balanced" way were not sufficiently clear, she added.
"I have orally indicated concerns about both the clarity of this rule, which may leave too much discretion in individual cases, and about the lack of limiting criteria, which could lead to ... a problem of proportionality in the regulation of media freedom," said Kroes.
Following talks with European Commission President Jose Manuel Barroso earlier this month, Hungarian Prime Minister Viktor Orban said that if EU legal experts found shortcomings in the law, he would be willing to amend it.
But Orban has said he is confident the law is not in violation of any EU laws because it draws on legislation in other member states such as Denmark, France, Germany and Italy.
(Reporting by Justyna Pawlak; editing by Mark Heinrich)
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