BUDAPEST (Reuters) - Hungary’s parliament passed legislation on Tuesday to tighten government control over news outlets which media watchdogs say is arbitrary and ill-defined.

The new National Media and Communications Authority (NMHH), dominated by people loyal to the ruling Fidesz party, will oversee all public news production and its powers will include levying big fines on private media that violate the law.

Luxembourg Foreign Minister Jean Asselborn criticised the move in an interview with Reuters in Germany, saying the European Commission must take swift action against it.

“The plans clearly violate the spirit and the letter of EU treaties,” Asselborn said, adding: “It raises the question whether such a country is worthy of leading the EU.”

Hungary takes over the European Union’s rotating presidency on January 1.

“It’s a direct danger for democracy,” Asselborn said in a telephone interview. “The state will control opinion.”

Asselborn said the law would put Hungary in a similar boat as Belarus. “Until now (Alexander) Lukashenko was considered to be the last dictator in Europe. When the law takes effect, that won’t be the case any more.”

In Hungary about 1,500 people protested near parliament late on Monday against the media law.

Since Fidesz won a two-thirds parliament majority in April, it has put its own people into key posts at public institutions such as the financial regulator and the state audit office, as well as the NMHH.

The media law, seen as the latest piece of that drive, received 256 votes with 87 against and no abstentions in parliament.

Critics have called the law heavy-handed, saying it does not clearly lay out what news outlets have to do to comply.

The Organization for Security and Cooperation in Europe (OSCE) said it severely restricted print and online media, which runs counter to OSCE standards.

“Regulating print media can curb media freedom and free public debate, which are indispensable elements of democracies,” Dunja Mijatovic, the OSCE media freedom representative, wrote in a report.

“Regulating online media is not only technologically impossible but it exerts a chilling, self-censoring effect on free expression.”

Besides regulatory changes, all public service news production, in television, radio and the national news agency MTI, will be merged and its contents disseminated free of charge.

The government said the new law was long overdue to bring outdated legislation up to date with changing technology and content. It said the law respected press freedom and was in line with those in fellow EU countries.