Hungary's ruling party to change constitution despite protests

BUDAPEST (Reuters) - Hungary's ruling party is set to push through changes to the constitution on Monday that critics say will curb democratic rights, despite warnings from European leaders and a protest by thousands of people in Budapest at the weekend.

The changes are seen by critics as the latest in a series of moves by centre-right Fidesz party to cement its position in public institutions via its large parliamentary majority.

They scrap all decisions by the country's top Constitutional Court made before the new constitution entered into force in 2012, discarding a body of law often used as reference.

They also create room for restrictive new regulations in higher education, homelessness, electoral law and family law -- the main focus of Saturday's protest in the capital.

European leaders have warned they may run counter to European Union rules and civil groups planned a further protest on Monday evening to urge President Janos Ader to veto them.

The forint fell more than one percent to the euro to new 9-month lows at 303 on concerns about the vote and steps by the central bank's new Governor Gyorgy Matolcsy to curb the powers of two of his vice governors.

Gergely Gulyas, deputy leader of the Fidesz parliamentary group, told the right-wing daily Magyar Nemzet Fidesz had no reason to put off the vote despite "domestic and international kerfuffle."

"It's natural that the governing majority uses the authorisation that it got in democratic elections," he said.

CHECKS AND BALANCES

Last week the European institution responsible for defending human rights, the Council of Europe, urged Budapest to postpone the vote, fearing for Hungary's democratic checks and balances, and the U.S. State Department and human rights organisations have also expressed concerns.

Prime Minister Viktor Orban is expected to address parliament on the issue at 1200 GMT.

Asked about the vote, German Foreign Minister Guido Westerwelle said on Monday Germany expected European countries to live up to the continent's values:

"It is not only about constitutions and rights, written on paper - one has to live up to it," he said in Brussels.

Hungary's former conservative President Laszlo Solyom, who is also a former head of the country's top Constitutional Court, said a presidential veto was the last resort to prevent the two-thirds governing majority from overruling the Court at will.

"Parliament's supreme legal standing was typical of the Communist one-party system in Hungary," he wrote in the daily Nepszabadsag.

In a phone call on Friday, European Commission President Jose Manuel Barroso told Orban that his government and the parliament should address concerns "in accordance with EU democratic principles".

Orban sent a letter to Barroso after the call in which he pledged Hungary would conform to the norms and rules of the European Union, without offering specifics, according to a copy of the letter posted on the state news agency MTI's web site.

Orban's party rewrote the constitution in 2011, saying the old one was a hangover from Communist rule, and they wanted to change it to reflect the new Hungary.

It says the amendments are mostly merely technical additions, and that its two-thirds parliament majority has the legitimacy to set rules it believes are appropriate for society as a whole, while respecting democratic norms.

Last week the foreign ministers of Germany, the Netherlands, Finland and Denmark asked the European Commission to strengthen control over the implementation of European fundamental rights. An EU diplomat said Hungary was one of the states they had in mind, but Budapest said that was not the case.

"The idea of financial sanctions (in the foreign ministers' letter) was not directly targeted at Hungary. Hungary in general warmly welcomes any kind of initiative that would like to strengthen democratic values among member states because we believe we can align with these rules very easily," government spokesman Ferenc Kumin told Reuters.

Kumin also said the ruling majority had heeded concerns about mandatory voter registration being included in the constitution and had scrapped the proposal, in line with an earlier constitutional court ruling that annulled it.

(Additional reporting by Ilona Wissenbach in Brussels. Editing by Philippa Fletcher)

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