German Chancellor Angela Merkel criticised Wednesday a new law in Hungary banning LGBTQ educational content for children as "wrong" as a European row on the measure hotted up.

"I consider this law to be wrong and incompatible with my understanding of politics," Merkel said in response to a query from a far-right lawmaker at government question time in parliament.

The German leader said she saw it as a contradiction that "single-sex partnerships are allowed" in Hungary "but education about them is restricted".

"That impacts freedom of education and such matters and is something I oppose politically," she said.

European Commission president Ursula von der Leyen has condemned the Hungarian law as a "shame" that went against EU values, saying it "clearly discriminates against people on the basis of their sexual orientation".

She said the Commission would raise legal concerns over the law with Budapest, and added: "I will use all the powers of the commission to ensure that the rights of all EU citizens are guaranteed whoever you are, and wherever you live."

Merkel declined to be drawn on the Commission's plans against Budapest, or on a disputed decision by UEFA refusing to allow the Munich stadium hosting Wednesday's Germany-Hungary Euro 2020 match to light up in rainbow colours.

Munich city authorities had planned the display to "send a visible sign of solidarity" with Hungary's LGBTQ community.

Fifteen of the EU's member states have signed up to voice their "grave concern" at the LGBTQ law that Budapest argues will protect children.