In the last 18 months, nine European governments have lost power: Ireland, Portugal, Spain, France, the Netherlands, Denmark, Italy, Greece, and Romania. Above: The Hungarian Parliament in Budapest. Photo: Jozeff

Voters from Athens to Bradford, via Paris, have been loudly saying “A plague on all their houses” to the established parties that have presided over the economic mess in Europe. As the financial crisis deepens in several countries, extremists offering simplistic solutions from a past era may well emerge as winners in elections or as coalition partners in national governments. That is a potential threat to democracy, as serious for Europe as the financial crisis. But the European Union looks as though it will be as weak in dealing with the political and social threat as it has with the economic one.

Take the spineless way European leaders have dealt with the challenge posed by Hungary over the last couple of years, where there continues to be a crisis of democracy. A small parochial story illustrates a wider point. In Budapest, the rapper Dopeman has been under criminal investigation on potential charges of “insulting the state.”  The lyrics of one of his songs mock the Hungarian national anthem and crudely satirise leading government figures. As a cause celèbre, a gangster rapper with dubious musical ability may not seem of great significance. But his story is a depressingly familiar one in contemporary Hungary.

Two decades ago, Hungary seemed the Eastern bloc country that could most easily adapt to the western way of life. But it has been transformed into the most autocratic state in the EU, while the rest of Europe has stood idly by.

The Dopeman case is also full of ironies. When in the 1980s the current prime minister Viktor Orbán was a firebrand dissident, he was a passionate devotee of rock music, which the Communist regime thought subversive. And he too was once threatened with that Soviet-era charge against troublemakers of slandering the state. In 1988, as one of the founders of Fidesz (it means “The Alliance of Young Democrats”) and the voice of the student-led protests, the recent law graduate was hauled in for questioning by the police. “You’ve broken the law by starting this group,” his interrogator told him. “And which law exactly is that?” Orbán replied. “I don’t know… you’re the lawyer, you tell me.”

For 20 years Orbán has been the best known politician in the country. Hungarians have liked him and loathed him by turns. Formidably clever, he is the kind of leader who makes the weather. He has rebranded Fidesz from a liberal Party that used his favourite slogan, “Don’t trust anyone over 35,” into an aggressively nationalist, populist, Christian group dominated by him.

Since the fall of Communism, Hungary has been the worst governed of any of the former Eastern bloc states, including Orbán’s first term, which lasted four years from 1998. Successive administrations borrowed too much, spent too much, lacked the courage to make essential reforms and were mired in sleaze.

But essentially there was consensus about the kind of country Hungary aspired to be: a modern liberal democracy within Europe. It was only when Orbán won an overwhelming second election victory two years ago, with 52 per cent of the vote and 68 per cent of the seats in parliament, that the direction changed. Orbán began to remake Hungary in his image, as he had remade Fidesz.

Hungary is in a desperate economic plight, saved from bankruptcy only by handouts from the International Monetary Fund and European Union. Few of Orbán’s “reforms” address this financial catastrophe, which is on a par with that of Greece. They are mostly about politics: Orbán’s determination never to lose an election again, and about national or cultural symbolism.

Fidesz hacks have been handed nine-year terms on a media authority that has Soviet-era powers over the press, broadcasting and the internet. One of Orban’s best friends heads a judicial authority with hire-and-fire powers over judges and prosecutors. Her husband, a Fidesz MP, wrote the new constitution which renamed the republic of Hungary “the land of the Hungarians,” a formulation that includes minorities in neighbouring Slovakia and Romania. Orbán is gerrymandering the electoral system, which could now give Fidesz a permanent majority.

Hungary’s only independent radio station has been threatened with closure. Dozens of “opposition” journalists have been fired from state-run outlets.

It is easy to exaggerate. Orbán was elected in a fair election. More mature nations also have a “winner-takes-all” political mentality. Anti-Fidesz demonstrations proceed unhindered. The noise outside the door in Budapest at 4am is still the milkman, not the policeman. Yet increasingly the worry in Hungary is that Orbán’s “man of destiny” ambition is to create, effectively, a one-party state with Fidesz as the Party.

For most of the EU, engrossed by the debt crisis, events in a small country outside the eurozone barely registered until recently. Yet Hungary is a worrying example of what can occur in countries on the periphery of Europe where democracy has shallow roots. Few EU leaders spoke up loudly for the democratic principle in Italy or Greece when governments by “technocrats” were imposed. It seemed a given that looming financial disaster was too serious to be dealt with through politics and the democratic system which has seen western Europe succeed for 60 years.

In Hungary’s case, EU leaders rapped Orbán mildly on the knuckles and forced a climbdown on one of his proposals—his plan to place Fidesz apparatchiks in charge of the central bank, which clearly breaks EU rules. On other issues, Orbán makes emollient speeches in Strasbourg, slaps the backs of his fellow Christian Democrat leaders at summit meetings and introduces a few cosmetic changes. But when he returns to Budapest he promises his own people he will not bow to foreign pressure.

Hungary agreed to the Copenhagen requirements of 1993, which were designed to ensure that new members adhere to a range of democratic principles. It is difficult to make countries conform to them once inside the Union, but technically it can be done. If the EU does not stand up loudly for democracy, it is hard to see what is the point of its existence.