EU gives Hungary two months to address concerns over 'sovereignty' law

BRUSSELS (Reuters) - The European Commission said on Thursday it had given Hungary two months to alleviate concerns over a law that imposes jail terms for groups that accept foreign funds for political causes, before the issue could be referred to the EU Court of Justice.

The commission in February opened an infringement procedure over the law on "protecting national sovereignty", passed in December, which Brussels said violated the union's democratic values and fundamental rights.

The EU's executive arm said Hungary's reply to its February notice had not alleviated its concerns.

It said it had now sent a so-called reasoned opinion, which is a formal request to comply with EU law that gives Hungary two months to respond and take the necessary measures.

If Hungary does not comply, the commission can refer the case to the EU Court of Justice.

The Hungarian law sets up a separate authority to explore and monitor risks of political interference. It would punish banned foreign financing for parties or groups running for election with up to three years in prison.

Hungary's ruling Fidesz party has said the law is necessary to protect against foreign political interference.

(Reporting by Bart Meijer; Editing by Peter Graff)