Talks are bogged down, however, because “the Hungarian government has responded to European concerns with bogus promises”. The left-leaning daily continues –

For weeks, the Hungarian government has been aware of the conditions, which it has refused to accept. [...] The situation is clear. Brussels wants an end to the subversion of democracy, which must be restored. Orbán does not want to commit to such a change.

For its part, rival left-wing daily Népszabadság points out that –

… the government is in tight spot. […] The conditions for the loan, which have been known since January, have not changed. The state will have to guarantee the independence of the National Bank and the reliable functioning of the justice system. […] And that is not all: other problems have emerged with the new fundamental laws – notably with regard to legislation on the family and the electoral code –  because Europe now believes that our country’s new constitutional system should be examined in its entirety. […] With regard to the very precise conditions concerning the justice system, it is clear that the rule of law is a point of honour for the EU. Brussels is not willing to negotiate on this point.

Although the government of Viktor Orbán is accused of drifting towards authoritarianism, the resignation of Pál Schmitt proves that in Budapest, "democracy functions," notes Polish daily Rzeczpospolita. According to the paper –

It turns out that the democratic mechanisms worked as they should [...] and Schmitt has proved the left-wing press wrong. If Hungary is the country depicted in the European press then the president should not have resigned. He was protected by immunity, was backed by a majority and had the sympathy of the Prime Minister. [...] Among the many crimes charged against the government of Viktor Orbán, there is the fact of having allegedly destroyed the independent media. Yet, it was the opposition press [HVG magazine] that revealed the serious charges against the Head of State chosen by the ruling Fidesz [Party] that led to the resignation. [...] The free press played its role efficiently. So, how are freedom of expression and democracy doing in Hungary? Not bad, in the end.

In HVG, Gaspar Miklos Tamas writes ironically of "poor uncle Plagi" derived by combining Pali, the nickname for Pál, with plagiarism. The resigning president, according to the philosopher, was nothing more –

… than the fall guy for an ethical mish-mash for which he was not responsible. He acted as he learned to act among the dregs of the old regime and, until the end, he failed to understand that, for the generation with democratic and free-market illusions, this was both amusing and disgusting.

This point of view is shared by Martin Ehl in the Czech daily Hospodářské Noviny. According to the leader writer –

Schmitt was no more than a puppet which Orbán could get rid of at any time. The plagiarism charge that finally made him resign was nothing more than a stick brandished by that media close to former socialist and free-market leaders.

As for Schmitt's successor, his name –

… will provide an indication of the strength of Viktor Orbán and of the Fidesz two years after the launch of their hard-line national and international policies. Given Hungary's inauspicious situation in Europe, the Hungarian Prime Minister would be well-advised to impose a personality without a party, even without any political affiliations but who is well-known abroad. However, if the Parliament choses someone from the hard-core of the Fidesz, more headaches can be expected, in Budapest as well as in Brussels.

“Most countries in central, eastern and south-eastern Europe have seen qualitative losses in their democracies, their market economies and their political management in recent years,” says the foundation, which is very close to business circles. It attributes the change to political polarisation and some leaders’ hunger for power. Among the European states highlighted are Hungary (top of the rankings), Slovakia, Albania, Kosovo, Macedonia and Montenegro, while Poland and, to a lesser extent, Serbia get better marks.

... this should not have happened. When [Viktor] Orbán was elected, he was surrounded by influential friends in a conservative Europe. There could be wide-spread optimism that the Hungarian Prime Minister would achieve his objectives. But these objectives did not exist [...] The government, which is always touting national interests, has only managed to achieve what the European Commission considers an exemplary punishment. [...] Yes, this is a historic day. No European government had ever yet been so foolish.

Speaking for the right-wing, Magyar Nemzet shows signs of resignation -

The bell tolls for us. [...] We were sent a preventive strike to warn all the spendthrift countries. We are a dissuasive example. [...] The irony of it all is that the legal basis for this ruling was approved in 2011 – under the Hungarian EU presidency.

EU member states will be called on to endorse the freezing of 495 million euros this March: a decision that aims to punish Budapest for “insufficient” efforts to reduce its budget deficit.

For the conservative daily, which is close to the Orbán government –

The decision is unjust because it does not take into consideration efforts already made by the country in its drive to reduce the deficit.

For its part, another right-wing daily, Magyar Nemzet, voices concern and indignation –

This has gone beyond a joke. The game has taken a serious turn. We have grown used to attempts to undermine our international reputation in Brussels and Strasbourg, but now the fact that European grants are at stake could compromise the future of this country […] This is not one of those endless campaigns to discredit our country. The Commission has crossed the Rubicon. Today it is not just a matter of the fate of the Orbán government which Brussels wants to bring to its knees. This decision will directly affect the daily lives of Hungarians […] and it presents Europe as a Union whose leaders hold its citizens in contempt.

According to the daily, data from a poll of 500 people in three regions – Upper Austria, Lower Austria and Burgenland – demonstrates that the opening of borders, 20 years ago, is no longer perceived as a blow to stability in the country.

Tourism and trade have done much to improve cross-border relations, with “residents of neighbouring regions in the Czech Republic, Slovakia and Hungary mainly crossing the border to shop. The increase in trade has helped boost purchasing power in economically weak areas of Eastern Austria, and it is therefore not surprising that the local population feels that it has had a positive impact on the Labour market: 48% of those polled in Upper Austria, 40% in Burgenland, 36% in the area of Lower Austria next to Slovakia and 34% in the area of Lower Austria next to the Czech border remarked on “positive change” in the labour market.

The only negative point highlighted by the survey was a perception that crime prompted by more contact with the East is on the increase: an impression that Die Presse points out is not confirmed by the statistics.

The question comes up as to whether the government’s story is true – that this is a leftist-liberal conspiracy, and why is Hungary always the target?   [...] We must not forget that by joining the Union, we respect not only Community law but democratic values as well. [...]  For the moment, this motion has no legal consequences. Parliament has given enough time to the Hungarian government to act. We should make the most of it.

Unsurprisingly, Magyar Hirlap attacks the Hungarian socialist MEPs. In a commentary entitled “A mess of pottage,” Zsolt Bayer, journalist member of the Fidesz party of Victor Orbán, and personal friend of the latter, wonders -

How is it possible that there is a communist group within the European Parliament? [...] They are no better than the Nazis. [...] The behaviour of the Hungarian Socialists is unimaginable in any other country. During the sanctions against Austria at the time of Haider, for example, the leader of Austria’s Socialist Party called for the hounding of his country to stop.

Vilmos Hanti, the leader of the Hungarian Federation of Resistance Fighters and Anti-Fascists (MEASZ), who called for the demonstration against Dörner, told the newspaper that “the mayor of Budapest could have withdrawn his decision, but the appointment was in line with the policy favoured by Fidesz, the country’s ruling party” led by Viktor Orbán.

For its part, rival daily Népszabadság describes the scenes outside the theatre as “surreal”: on the one hand there were demonstrators with placards that read “Protest against Arturo Ui!” or “We are part of Europe,” while extreme right counter demonstrators chanted such slogans as “Dirty Jews!” and “Traitors to the homeland!”

Orbán “won the debate with his bitter critics,” remarks pro-government daily Magyar Hìrlap, which takes issue with-

… the MEPs of the IMF coalition who were briefed with material prepared by the opposition in Budapest. […] The Prime Minister refused to accept European diktats, but demonstrated that he is open to dialogue on all subjects. However, his European approach is of no interest to the ranks of the European faction of the IMF […] which speaks in a democratic voice, but is ruled by the law of the monetary fund.

Népszava devotes its front page to what it describes as “a dialogue of the deaf in Strasbourg.” For the opposition daily:

Orbán pretended not to understand the reasons why he has been criticised in Europe. […] As usual, he resorted to a mixture of demagogic platitudes and defence of the motherland.

“Everyone took political sides in a partisan debate,” regrets the newspaper, which highlighted the example of the support for Orbán voiced by Polish Prime Minister Donald Tusk, who deplored “the hysterical atmosphere in the European parliament on the question of Hungary.”

As for criticism from the European Union, he is asking for "a balanced judgement" on the part of the European Commission and highlighted that "the criticisms from the international press are personal opinions". Orbán is convinced that-

... nothing is new in the current situation: when the left is not in power, for the opposition and for its foreign partners democracy is at an end. […] But we have always been the democrats and we have always fought for democracy while our current adversaries defended the Communist dictatorship.

These "national wrongdoers", as Magyar Hírlap calls them in its leader article -

... want to bring down not only Orbán, but also everything Hungarian. They want the fall of democracy by majority rule, of the will of the Hungarian people. We have no other choice but to struggle for our independence, for our land, for our Homeland.

As one year ago, while voices demanding sanctions against the authoritarian Viktor Orbán are growing, EU leaders have abstained from taking a stand. The Commission is “studying" the situation, and only a few MEPs are calling for a response from the European Union.

However, should Hungary be punished the way Austria was punished in 2000, when Jörg Haider’s far-right party entered the government? At that time Vienna’s fourteen partners broke off all bilateral contact and withdrew their support for Austrian candidates for positions in international organisations. But these measures were lifted after nine months, without having forced Chancellor Wolfgang Schüssel to bow to the pressure. Austria’s extreme right stayed in the government until 2007.

Hungary poses a thorny problem. In many ways, the system that has been established – it can only be called a package of measures to promote the power of Fidesz, Orbán's party – strikes at the values underlying European integration.

The organised weakening of all the opposition forces, the cosying up to Jobbik, a far-right party that has its own militia, and the escalation of nationalism among the Hungarian minorities in other EU countries are sufficient reasons to call Budapest back into line.

However, respect for values and conformity should not be confused with consensus. Several elements of Viktor Orbán’s programme can be contested, condemned and fought, but they do fall within a range of political positions to be found in all European countries. The desire to retain political control over monetary policy, for example, is not the prerogative of Fidesz, and the role of the central bank is even at the heart of the discussions on the eurozone crisis.

The reference to God in the constitution, the rejection of homosexual marriage or the possibility of restricting the right to abortion are conservative positions; yet the first is found in Greece, the second in France (for example) and the third in Ireland, Malta and Poland.

If Europe wishes to keep Orbán’s Hungary within the European democratic ambit, it should not mistake its target or its method. If it does, it risks being drawn into two dangerous processes. The first would be to sanction Budapest with grand speeches and then have to backpedal, as was the case with Austria, or be forced to engage in an uncertain process of exclusion.

The second would be to set up a system of double standards by sanctioning Hungary for its government’s political stances, when other states are equally likely to be singled out. As reactionary as it was, Poland under the Kaczyński brothers was never ostracised by the EU.

The fact that Hungary is a linguistic and cultural island in the middle of Europe reinforces the dangerous dialectic between its tendency to see itself as a besieged fortress and the miscomprehension of its neighbours, who do not grasp all the terms of its internal debates. All the more reason for Europe to be vigilant, firm on its principles, but clear and measured in its actions.

But is this "last gasp of the rule of law" a genuine blow "for the government of the autocratic Viktor Orbán?" wonders the German daily Süddeutsche Zeitung. In fact, the decision may have no impact because as of January 1, 2012 a new law will go into effect which reduces the powers of the Constitutional Court and allows Orbán's party to appoint members of the court. "It is nearly certain that the current decision will be overturned," warns the paper. The day following the Court's decision, Klubradio, considered as the only opposition radio in the country, had its license revoked by decision of the Medial Council, the very body whose powers the Court was seeking to curtailed.

For the centre-left daily Népszabadság, this latest episode shows that "the Union has already renounced dealing with the Orbán regime: why are we financing an authoritarian, anti-democratic and anti-European system? The problem is that the delegation is gone but we remain – at the edge of the abyss".

As for right-leaning daily Magyar Hírlap, it highlights that "this was the worse time to attract the anger of the IMF and the EU." The paper adds that "the government committed a tactical error in presenting the new bill on the National Bank during the negotiations," and concludes that "it's better to be with the IMF and the EU than without them."

Prime Minister Viktor Orbán justified his attitude, explaining that  "parliament will have to debate Hungary’s participation in the Eurozone member states’ agreement,  because it is a matter of national sovereignty".

Népszabadság points out that Orbán’s behaviour in Brussels has been prompted by domestic political considerations. On one hand, by forcing the pro-European opposition to support an agreement that will reinforce budgetary discipline, “Orbán wants to share  responsibility for austerity measures,” notes the centre-left daily. On the other, the Prime Minister could take advantage of the situation to separate himself from the far right, which supports the government in parliament but is opposed to the agreement.

For its part, right-wing weekly Heti Válasz attacks the government with unusual virulence. “Orbán appears to be repeating the mistakes of previous socialist governments that were judged to be incoherent and incompetent,”  writes the magazine, which argues that the government has been discredited by its incoherent behaviour  and “can no longer be taken seriously.”

Losses would be absorbed by the banks, which outrages Austrian banks, which have holdings worth €5 billion in Hungary. Vienna asked the European Commission to examine the possibility of a suit before the European Court of Justice. Der Standard believes that Budapest is shooting itself in the foot because, by intervening in private contracts, it risks causing investors to flee.

This “individual integration into the EU” should be a warning to the government, which, incapable of solving social and economic problems, could see “hundreds of thousands of Ukrainians obtain foreign citizenship” the Russian newspaper warns. But the real threat that’s emerging is separatism, since Kiev can “lose control over the territories inhabited by the foreign nationals,” Nezavisimaya Gazeta adds, quoting the Ukrainian expert Alexander Gavrich: “For separation, it’s enough that the slogans of cultural belonging be transformed into political demands.”