BUDAPEST — It was a continent-wide party to mark the end of history.
“The divisions of the Cold War are gone — once and for all,” declared then-European Commission President Romano Prodi as he welcomed 10 new members to the E.U., eight from the former communist East.
And yet, 14 years later, new divisions are emerging — many of them following old lines. The triumph of liberal democracy is being attacked from within by E.U. members that openly deride the club’s values, principles and rules. The bloc, meanwhile, has been incapable of fighting back, its weakness a side effect of the optimism with which it grew.
Ground zero for the rebellion is here in Hungary, where Prime Minister Viktor Orban is running for reelection Sunday with boasts of his illiberalism, swipes at the hostile E.U. “empire” and promises to further tighten his grip on a country dancing ever closer to the edge of autocracy.
Orban’s defiance presents the E.U. with a far different threat than the one it faced in 2016, when Britain voted to exit and speculation swirled over who might go next. It may be more serious than that — a challenge that endangers the character of the union.
“Orban doesn’t want to leave the E.U.,” a senior German official said. “He really wants to change the E.U.”
By some measures, he’s succeeding. Far from being a pariah, Orban has found imitators in Poland and admirers in the Czech Republic, Austria and even at top political levels in Germany.
Orban’s European opponents, meanwhile, have proved unable to curb his behavior. Rather than punish Hungary for its intransigence, Brussels continues to supply the government with billions of euros in E.U. subsidies — money that Orban’s domestic critics say is vital to his survival because it boosts the economy and puts cash in the pockets of favored cronies.
“Orban is waging his freedom fight against the E.U. with huge amounts of E.U. money,” said Peter Kreko, executive director of the Budapest-based policy research firm Political Capital. “Lenin said, ‘Capitalists will sell the rope to us with which we’ll hang them.’ Well, the E.U. is not selling. It’s giving it to Orban for free.”
The E.U. never gave itself adequate tools for dealing with a wayward leader such as Orban because it never imagined needing them, even as the alliance spread far beyond its original Western European core to countries with scant experience of democratic governance.
At the start of the millennium, the bloc had just 15 members — none of them east of the old Iron Curtain. But after the fall of communism, East European countries that had been in the orbit of the Soviet Union looked to the E.U. and NATO as institutions that could bind them to the West and keep them out of Moscow’s grasp. Prosperous Western neighbors spotted an opportunity to spread their influence across the continent.
Everyone assumed that, with time, differences would recede as the new members grew to adopt the values, rules and institutions of the old ones.
“We wanted to believe it. History would go on and we would be on the right side of it,” said the German official, who spoke on the condition of anonymity because he was not authorized to speak for the record. “We never imagined that history could go the other way.”
For Hungarians, too, there were expectations that, in retrospect, look naively optimistic.
“It was a fantastic constellation. We wanted it. The West wanted it. It was back wind in every respect,” said Peter Balazs, a former Hungarian diplomat who was deeply engaged in the E.U. accession process. “And the follow-up was in the fairy tales: They live happily ever after.”
Balazs, who would go on to become the country’s foreign minister, said Hungary spent a decade proving to the E.U. that it was worthy of membership, working assiduously to meet the club’s strict rules for entry.
But once Hungary had joined, the union’s best leverage to keep the country on a free and democratic path evaporated. Meanwhile, no one had seriously planned for what would happen after Hungary and others joined the bloc — a failure that Balazs attributed to parallel illusions.
“A Hungarian illusion that the E.U. would do it, that somebody else would solve our problems,” he said. “And for Europe, the illusion that they would be like us.”
The result was fertile ground for Orban. Since coming to power in 2010, he has simultaneously used the bloc as a rhetorical foil and cash spigot — all without fear of meaningful consequences.
“I have, in fact, more respect for the decency of Euroskeptics who at least say, ‘Well, I don’t like the European Union, and I don’t like the values, and I’ll go out,’ ” Guy Verhofstadt, who was prime minister of Belgium when Hungary joined the E.U., told Orban last year when the Hungarian leader came to speak at the European Parliament. “You want to continue the money of European funds, the money of the European Union, but not the European values.”
Verhofstadt, who is now the leader of a centrist bloc of the European Parliament, has condemned fellow E.U. leaders for refusing to hit Hungary with sanctions.
Orban openly brags of his aim to build “an illiberal state based on national foundations” and cites Russia and China as exemplary models.
He has consolidated his party’s influence over formerly independent arms of the Hungarian state and society, including prosecutors’ offices, government auditors and the media. If he wins reelection, as is widely expected, the 54-year-old Orban has promised to press ahead with legislation that would allow the banning of aid groups that work on behalf of refugees or other immigrants.
On the campaign trail, he delights crowds by lashing out at Brussels, part of a trinity of enemies that also includes Muslim refugees and the Hungarian American investor George Soros.
As recently as 2011, Hungary scored the highest rating possible from Freedom House, an international nongovernmental organization, but it is now the least free of all E.U. members. The corruption monitor Transparency International ranks it the second most corrupt country in the bloc, just behind Bulgaria.
Yet Hungary is also among the greatest net beneficiaries of E.U. funds, receiving 4.5 billion euros (or $5.5 billion) in 2016 — equivalent to 4 percent of the country’s economic output — while contributing less than 1 billion euros, or $1.23 billion.
The money has helped to buoy the Hungarian economy, which has been growing at a healthy clip. It also has found its way into the pockets of friends, allies and family members of the prime minister.
“It’s E.U. taxpayers that feed the system and allow Orban to grow strong,” said Sandor Lederer, chief executive of the Budapest-based anti-corruption watchdog K-Monitor. “He’s decided it’s not enough for you to be the political leader. You also have to be the leader of the thieves, and this is the only way you can really exercise power.”
The mayor of Orban’s home village, a gas-fitter by trade, has become one of Hungary’s richest men during his schoolmate’s run leading the nation. Much of his wealth has been fueled by government contracts.
Companies owned or operated by Orban’s son-in-law have also fared well in the competition for government work, winning lucrative E.U.-funded contracts to upgrade street lighting in towns and cities across the nation. In January, the E.U.’s anti-fraud monitor found “serious irregularities” and “conflicts of interest” in the awarding of those contracts, which totaled more than 40 million euros, or nearly $50 million.
But Brussels-based investigators are virtually powerless to do anything about it. Authority to pursue the matter resides in Hungary, with prosecutors who are widely perceived to do the bidding of the ruling party.
That is typical of the E.U.’s dilemma in how to address Hungary’s piece-by-piece moves against the rule of law and democratic norms.
Until recently, the bloc did not even have measures to address rule-of-law violations that fell short of triggering the bloc’s nuclear option — E.U. sanctions that would suspend a country’s voting rights.
In 2013, as a direct reaction to Orban’s moves, the E.U. enacted new rules that gave policymakers in Brussels the power to flag developments in member countries that set off rule-of-law concerns and force a dialogue with national leaders. But the new powers were not retroactive, and Hungary had already enshrined many of its legal changes. The rules also lacked teeth. Although E.U. officials searched for ways to open investigations, they found Orban was an excellent tactician, walking right up to their lines without crossing them.
“We can’t just go in there flippantly,” said a senior E.U. official who is involved in monitoring violations of European treaties and who spoke on the condition of anonymity to describe backroom discussions.
Meanwhile, the nuclear option — known as Article 7 — has effectively been neutralized. The problem was underlined after the European Commission triggered the article for the first time in December against Poland. But the like-minded governments in Poland and Hungary have vowed to protect one another should either be targeted.
Other countries, too, may have Hungary’s back. Away from the campaign trail, Orban can often be seen joking around with fellow leaders at E.U. summits in Brussels. If they were to move against Orban, it would cost them comity and allies at an already fractious time.
It could also cost them politically at home. Orban’s relentless attacks on refugees and immigrants have been a winning message in Hungary. Others, including Austrian Chancellor Sebastian Kurz and German Interior Minister Horst Seehofer, have taken notice and adopted similarly hard-line messages, while publicly welcoming the Hungarian prime minister as an honored guest.
Far from fearing the E.U.’s wrath, Orban’s allies see the historical pendulum swinging their way.
“More and more, political leaders in Europe are coming to the same conclusion,” ruling party spokesman Balazs Hidveghi said. “Viktor Orban is right.”
Birnbaum reported from Brussels. Gergo Saling in Budapest contributed to this report.