Hungary and Romania agree pact

BUDAPEST, Hungary -- Hungary and Romania have signed a key agreement on a controversial law granting special rights to ethnic Hungarians living in neighbouring countries.

Benefits include access to state-funded jobs, education and healthcare in Hungary.

The Status Law, which takes effect on January 1, 2002, also applies to minority Hungarian populations in Ukraine, the former Yugoslavia and Slovakia.

Hungarian Premier Viktor Orban and his Romanian counterpart Adrian Nastase signed the agreement allowing the implementation of the law after lengthy negotiations on Saturday.

Romania had opposed the law, arguing it was extraterritorial and would discriminate against its local population, turning them into second class citizens.

But it lifted its opposition after Hungary agreed to grant work permits to all Romanians, regardless of ethnicity.

"We succeeded in getting a compromise without letting this dispute contaminate a rather positive relationship," Nastase told a news conference after signing the pact.

The agreement allows Hungary to issue three-month work permits which can be extended.

Under the 1920 Trianon Treaty, the World War One Allies carved up Hungary, redistributing two thirds of its land and population to surrounding states.

Up to 3.5 million ethnic Hungarians live abroad, at least 1.6 million of them in Romania.

Hungary is continuing negotiations with Slovakia which also opposes the Status Law.

Ukraine and former Yugoslavia have both said they can live with it.

Budapest has agreed to review the law six months after it becomes effective.

The European Union, which Hungary plans to join in 2004, has not sent a clear message on what it thinks about the Status Law.

In its recent report on Hungary the EU's Brussels-based Commission said the law was in "apparent contradiction" to the European model of minority protection.