Budapest, Hungary - As the West holds its breath waiting to see if Russia will intervene in Ukraine, there is one country looking to Moscow for inspiration: Hungary.
In a speech in late July, Prime Minister Viktor Orban said he wanted to turn Hungary into an "illiberal state" and used Russia as a model example.
"We want to build a workfare society ... which is willing to bear the odium to declare that it is not liberal in character," said Orban, adding the 2008 financial crisis proved liberal democracies cannot be competitive.
The speech proved highly controversial, grabbing international headlines and calls by Hungary's opposition groups for the European Union, of which Hungary is a member, to monitor the country's reforms.
"Hungary has gone so far as to actually reject explicitly by the prime minister the very values that guide the European Union and NATO. This has never happened before, this is a unique event," said Charles Gati, a professor of European and Eurasian studies at John Hopkins University.
|Prime Minister Orban says he wants to build a society 'not liberal in character' [Reuters]
Government spokesman Zoltan Kovacs said the prime minister was only talking about the limits of liberal democracy and how to deal with those restraints. Kovacs said the reference to looking towards Russia, as well as other countries Orban mentioned including China, Turkey and India, were regarding economic models.
"He was not referring to democratic institutions and the decision-making process," Kovacs told Al Jazeera.
However, director of the Hungarian-based Political Capital Institute Peter Kreko said Russia's influence over Hungary goes far beyond economics.
"Putin serves as a role model for him in the sense that Putin is … the frontman of the ideological fights against Western Europe and Western interests."
Hungary's move towards Russia has been in the works for years - and it seems Russia has taken note. Last year, Vladimir Putin sent a letter congratulating Orban on his birthday and thanking the prime minister for greatly strengthening relations with Russia, according to Hungary's state news agency MTI.
In January, Russia agreed on a controversial deal to loan Hungary up to $13.5bn to build two reactors at a nuclear power plant in the country's south. It will be the largest construction project in Hungary since the end of communism more than 20 years ago.
In early July, Orban said Hungary would go ahead with the South Stream pipeline project that would import natural gas from Russia through a route that would bypass Ukraine.
To link Hungary's economy stronger and stronger to Russia which is in a trade war with… the European Union and in a diplomatic conflict with the European Union, I think it's highly dangerous and highly risky.
Andre Goodfriend, who is currently in charge of the US embassy in Hungary while it awaits a new ambassador, told Al Jazeera that Hungary needs to diversify its energy imports from other countries.
"We've been encouraging Hungary and many other countries to diversify their sources of gas [and] find other ways ... to share gas between different countries ... without having it necessarily come from Russia," he said.
Kovacs, the government spokesman, argued that there was a long, thorough process before the deal was made.
"It's been competitive in the form that the previous government as well as this one has looked around and tried to measure all possible alternatives and possibilities," he said.
Concerns exist, however, that the nuclear deal will increase dependency on Russia, which is already Hungary's main supplier of natural gas and oil.
European Parliament member Benedek Javor, who is part of a small leftist opposition group in Hungary, asked the EU to investigate the deal over whether it broke the law.
He said the Ukrainian crisis, sparked by then-president Viktor Yanukovich sacrificing an EU trade deal for closer ties to Russia, showed the risk of allowing Moscow greater influence over Hungary.
"To link Hungary's economy stronger and stronger to Russia which is in a trade war with … the European Union and in a diplomatic conflict with the European Union, I think it's highly dangerous and highly risky," Javor told Al Jazeera.
What's in it for Russia?
But what does Russia get out of a relationship with a relatively small country such as Hungary?
"The main reason for Russia's interest … is to weaken the European Union," John Hopkins University professor Gati said. "It is doing so … primarily by several countries dependence on Russian energy and, therefore, these countries' willingness to close their eyes to some aspects of Russian behaviour."
Putin feels that the European Union is in a very weak position.
Peter Kreko, director for the political consultancy firm Political Capital Institute, said focusing on Hungary is one of the best ways to undermine the EU because Orban has taken an antagonistic approach to the supranational government.
He added, however, that previous leaders have also tried to get closer to Russia. "Putin feels that the European Union is in a very weak position," Kreko told Al Jazeera.
Hungary is not the only EU member-state to have maintained ties to Russia during the Ukrainian crisis. Austria also said it will go along with the South Stream gas pipeline project, while Germany, where exports to Russia in 2013 equated to almost $50bn, avoided placing tough sanctions on Moscow before the Malaysian Airlines M-17 downing in eastern Ukraine.
Meanwhile, France said it plans to go through with the delivery of a mistral warship to Russia in a deal worth $1.6bn.
But so far, only Hungary has been accused of a democratic backslide. Last year, the European Parliament adopted a non-binding resolution stating that Hungary was undermining the independence of its own judiciary and was rushing through legislation.
Goodfriend echoed similar concerns about the check on power in Hungary.
"A number of those checks and balances don't exist here and with a government that has a two-thirds majority [in parliament], it's especially important that they use that majority to ensure that they carry out legislation responsibly."
|Prime Minister Orban called for autonomy for ethnic Hungarians in western Ukraine [Reuters]
Uptick in nationalism
Kreko said there are also signs that Orban is mimicking Putin's strategies, such as removing his limits on power and increasing nationalist rhetoric.
In Orban's July speech, he discussed how "paid political activists" working for NGOs with foreign funding were preventing reforms in the country; a month earlier, Hungarian authorities raided the offices of NGOs receiving grants from Norway over accusations thay they are politically biased.
Kreko said this is similar to when Putin took aim at NGOs by introducing a law that requires organisations using funding from abroad to register as "foreign agents".
In May, Orban called for autonomy of ethnic Hungarians in western Ukraine, while in the east rebels allegedly backed by Russia were also demanding autonomy from Kiev.
It led to the Hungarian ambassador being summoned by the Ukrainian government, but government spokesman Kovacs said Hungary was simply asking for autonomy for minorities set out in international agreements.
According to MP Javor, other EU member states with fragile democracies could follow Hungary's footsteps if the EU does not act.
"This combination limiting democracy and stronger dependency on Russia makes the Hungarian situation extremely [worrying] for Europe as a whole."
Follow Kristina Jovanovski on Twitter: @kjovano