BRUSSELS (Reuters) - The European Commission started legal action against Hungary on Thursday over the right of foreigners to buy agricultural land, saying restrictions on such purchases violated the European Union's principle of free movement of capital.
"Hungarian legislation has restricted the rights of cross-border investors in a way that may violate EU law on free movement of capital and freedom of establishment," the Commission said in a statement.
"The European Commission has today decided to formally request Hungary to submit its observations on its legislation terminating certain contractual rights of investors to use agricultural land," it said.
This is the first stage of the infringement procedures under EU law and Hungary has two months to respond.
(Reporting by Jan Strupczewski; Editing by Sonya Hepinstall)
