The German Chancellor, who has faced criticism over her own open door policy on asylum seekers, said the country’s refusal to comply with a European Court of Justice ruling risked Budapest’s continued membership of the bloc.
Speaking to Berliner Zeitung on Tuesday, Ms Merkel said it was “unacceptable” of Budapest to reject the ECJ’s dismissal of its legal challenge against the EU scheme.
Hungary and Slovakia had tried to overturn the union’s 2015 plan to relocate more than 160,000 asylum seekers from Italy and Greece across all 28 member states.
But the case was dismissed by ECJ judges on Wednesday, who ruled that the allocations were “proportionate” and upheld the EU’s initial plans.
It means Hungary, Slovakia and Poland, all of which backed the challenge, are now legally obliged to take in an allocation of refugees as required by Brussels.
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But the Hungarian government is furious with the ECJ’s decision and refused to co-operate.
Hungarian Foreign Minister Péter Szijjártó told a press conference after the ruling that politics had “raped European law and values”.
“The ruling issued by the European Court of Justice in the migrant quota case is appalling and irresponsible,” he said.
“The real battle has only just begun.”
So far Hungary is yet to admit a single refugee from its 1,294 EU quota. Slovakia has only accepted 16 from the 902 asylum seekers it was accorded.
But Ms Merkel told the German newspaper: “When a government ignores a ruling by the European Court of Justice, that is unacceptable.”
And when asked if the row could ultimately result in Hungary’s dismissal from the EU, she did not rule it out.
The situation raised a “fundamental question” about an integrated Europe, Ms Merkel said, describing the bloc as having “a common area of justice”.
She said the issue would be raised at the European Council in October.
The European Commission is currently pressing ahead with a series of infringement proceedings against Hungary.
It has also launched a legal case against Hungary, Poland and the Czech Republic for refusing to take in migrants.
At a press conference in Brussels last week, EU migration commission Dimitris Avramopoulos said the ruling was a “very clear” message to the countries resisting its refugee allocation scheme.
“We have not changed our political position, it’s very very clear. It is mandatory and the messages were very clear from the very beginning,” he said.
“So member states are obliged legally and politically, even morally, to do their part of sharing in a responsible way the principle of solidarity in practice.
“If the member states that have not relocated at all do not change their approach in the coming weeks we should therefore consider to take the last step in the infringement procedure and refer Poland, Hungary and the Czech Republic to the ECJ.”