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Hungary's judicial reform breaks EU rules, top court says

* EU has concerns about democratic checks and balances

* Row over judges' retirement age one of string of conflicts

BRUSSELS, Nov 6 (Reuters) - A Hungarian law forcing judges to retire earlier violates EU law and must be repealed, the highest EU court has ruled, condemning a flagship reform of Prime Minister Viktor Orban's that Brussels sees as a sign of creeping authoritarianism.

The Court of Justice of the European Union said on Tuesday the law, which reduces judges' retirement age to 62 from 70, was too abrupt, failed to provide any transition for those obliged to quit and was not a sound way to lower the age of public sector workers.

The European Commission brought the challenge to the legislation that has forced hundreds of judges into sudden retirement.

The case was the latest EU attempt to curtail a string of contentious laws pushed through by Orban's conservative government using a two-thirds parliamentary mandate gained in April 2010.

EU officials say Orban's Fidesz party is trying to take hold of independent institutions ranging from the central bank to the judiciary. Budapest counters that its policies modernise Hungary and create jobs by getting more young people into the workforce.

Hungary must now comply with the EU court ruling. Failure to do so would allow the Commission to return to the Luxembourg-based court to seek sanctions and fines.

``The court's judgment is crystal clear,'' said EU Justice Commissioner Viviane Reding. ``Hungary must now take all the necessary measures to comply with the judgment as soon as possible,'' she said in a statement.

Orban, who has been dubbed ``Viktator'' by some opponents in Hungary, denies eroding democratic checks and balances.

But he has been forced to cede ground on his reforms, most notably on changes to the central bank law that caused a row with the European Union and International Monetary Fund earlier this year over the independence of the bank.

Amendments have resolved the standoff, although only after it had held up the talks on IMF/EU financing for months.

(Reporting by Robin Emmott; editing by Rex Merrifield)