Germany's minister of state for European affairs has raised the specter of financial sanctions in response to the coronavirus measures introduced in Hungary.

"We cannot explain to our population that countries finance a large part of their public investments with EU money and then violate the principles of the European Union," Michael Roth told the Welt newspaper in comments published Friday.

He said there should be a possibility of agreeing on EU financial sanctions with a qualified majority as part of the bloc's current negotiations on the 2021 budget.

Hungary's parliament, dominated by Prime Minister Victor Orban's ruling party, handed him sweeping powers to rule by decree until his government decides the COVID-19 crisis is over.

The emergency law also threatens journalists with prison if they publish what it deems "falsehoods" about the virus or the government's actions to slow it.

The European Commission told Hungary's Prime Minister Viktor Orban on Thursday that the emergency powers risk upending democracy and must be subject to proper parliamentary and media scrutiny.

Hungary on Thursday hit back at criticism from elsewhere in the EU of its coronavirus emergency measures calling it a "witch-hunt."

"Not only are we being criticized, but we are being subjected to a political witch-hunt and coordinated smear campaign," government spokesman Zoltan Kovacs said in a video posted to Twitter after European Commission chief Ursula von der Leyen expressed concern.