BRUSSELS (Reuters) - Amendments to Hungary's constitution appear to be incompatible with European Union law and action will be taken to overturn them, the EU's executive said on Friday.
The EU, the United States and human rights organisations have accused Prime Minister Viktor Orban's government of using constitutional amendments to limit the powers of Hungary's top court and undermine democracy in the former Soviet satellite.
In a letter to Orban, European Commission President Jose Manuel Barroso said that, based on an initial analysis, the Commission had serious concerns about the compatibility of the constitutional changes with EU legislation and the rule of law.
Once it has completed its legal analysis, the Commission "will have to take the necessary steps in order to start infringement procedures where relevant", Barroso told Orban.
He appealed to the prime minister, the leader of the nationalist Fidesz party, to "address these concerns and to tackle them in a determined and unambiguous way".
"This is without doubts in the best interest of Hungary and of the EU as a whole," Barroso wrote.
There was no immediate Hungarian response to Barroso's letter. Orban has dismissed criticism that the constitutional changes are anti-democratic and last month challenged EU legal experts to present evidence if they had any problems.
Barroso's letter said the Commission was particularly concerned about the legality of constitutional changes relating to European Court of Justice judgments entailing payment obligations.
It also raised concerns about powers given to the president of the national office for the judiciary to transfer cases, and restrictions on the publication of political advertisements.
The forint currency eased slightly after news of Barroso's letter to trade at 295.45 against the euro at 1348 GMT, but stayed near six-week highs hit earlier in the day at 294 as foreign investors encouraged by Japan's monetary stimulus continue to buy high-yielding assets in emerging markets.
Orban, a 49-year-old conservative who made his name as a young dissident when Hungary was behind the Iron Curtain, has overseen a rewrite of the constitution and four revisions.
He has imposed swingeing "crisis taxes" on some foreign firms and forced banks to write off some of the foreign currency debt owned by Hungarian households.
His opponents accuse him of harming Hungarian democracy and gambling with economic stability. The EU says he has eroded the independence of the courts, the media, the central bank and other institutions, pulling Hungary out of Europe's mainstream.
A deputy governor in Hungary's central bank resigned on Monday in protest at what she said was a campaign by Orban appointees to reduce the bank to a rubber-stamp for risky economic policies.
Orban says he has saved Hungary from a Greek-style economic collapse, his reforms are democratic because he won a huge majority in a 2010 election, and he is under attack because he threatens the interests of foreign business lobbies.
(Reporting by Adrian Croft in Brussels and Sandor Peto in Budapest; Editing by Michael Roddy)