Not as bad as you might think
Russia's clone inside the EU
The Hungarian PM has essentially adopted a Le Pen-like view of what his country should be like and has enshrined this view in the fundamental law with very little chances for a different party to change them even if Fidesz will lose control of the Parliament. He has rebuffed any criticism coming from outside, snubbing both Hilary Clinton and Jose Barosso. When the American ambassador wrote an article criticizing the changes, she was politely invited to keep her views for herself. When another former US ambassador has warned that Hungary might end up suspended from the EU, he was ignored. Negotiations on a new loan have been suspended after the IMF and the EU pleas for an independent central bank went unheard in Budapest. Meanwhile, the country is heading fast towards bankruptcy and the people are being hit hard by the 'unorthodox' economic policy of the government (they now have to pay the highest VAT in the EU, among other taxes and plunging national currency).
The clouds on the horizon
The worst part is that the EU can do nothing about this. It can warn and express preferences but these can all be ignored by the national government. The EU is not prepared for this kind of crisis as it takes for granted that all its member states are democracies and will remain that way. What will happen if Hungary becomes Europe's Russia and other central and eastern European countries follow in installing nationalist/populist governments? Even if the eurocrisis is resolved, the EU will be broken. I can see a number of ways in which the situation could lead to war. All you need is a nationalistic government in a neighboring country and all the talk about solidarity and brotherhood will be forgotten. The ugly faces of last century will be back.
The chances for the worst case scenario are still slim. A full break-up of the EU followed by war in Europe is still unlikely but clouds of the perfect storm are gathering in the right places. To simply ignore the threat and dismiss it would be the worst thing to do. The EU needs to force Hungary back into line by any means possible. I am sure the Hungarian citizens would rather be European than isolated within their own country. It is just a matter of forcing the government to listen to those citizens and not to the few radical voices that have not learned anything from the previous century.