STRASBOURG - The European Commission on Tuesday launched legal action against Hungary over its new legislation allegedly conflicting with European Union (EU) law.

The new legislation, which came into force on Jan 1 under Hungary's new constitution, violates EU treaties by undermining the independence of the country's central bank and data protection authorities and by the measures affecting its judiciary, the Commission said in a press release.

"The Commission is determined to take any legal steps necessary to ensure that the compatibility with European Union legislation is maintained," said Commission President Jose Manuel Barroso.

The Commission will send three formal letters to the Hungarian government and gave it one month to respond to the concerns. Member states suspected of violating the EU law may be brought to the European Court of Justice and face huge fines.

The criticism was defied by Hungarian Prime Minister Viktor Orban in an initial reaction to the challenges.

"We won't allow the international left to accuse Hungary through lies and baseless slander," his office said in a statement.

The EU and the IMF withdrew from loan talks with Hungary in December, insisting they would not start talks until the independence of the Hungarian central bank had been ensured.

Fitch Ratings, one of the top three international ratings agencies, earlier this month downgraded Hungary's credit rating to junk status, citing the standoff between the government and international lenders.

Another two major international rating agencies Moody's and Standard & Poor's took similar actions last month.