The recent struggle about the fate of CEU in Hungary is just the latest installment of a move towards what the Hungarian government calls ‘illiberal democracy’. In real terms, this is a misnomer as Hungary has become a democracy only in the sense of an (not really fairly) elected government, whereas most of the other institutions have been gradually dismantled: checks and balances, independent judiciary, independent press, academic freedom are all severely damaged.
I am not alone in this assessment: Just look at the recent relative performance of Hungary in the Bertelsmann Democracy Status Index. It not only tanks, it also tanks in a region with a declining trend (recent events in Poland might also drag the region average down, though).
The only positive aspect of the Hungarian lex specialis against CEU is however, that it gives salience to an issue which is much more worrisome than BREXIT or the debt crisis in Southern Europe: it is the question, whether the EU can continue to exist if some of its members cease to be democracies.
Historically, the European Communities were founded as a zone of economic integration and cooperation to stabilize the partly nascent democracies in Western Europe. One might argue that ironically, the economic integration has contributed to a destabilization of these democracies. And yet, in many respects the current resentment against the EU is just a typical example of scapegoating: the debt crisis, the integration in a global economy could perhaps have been mitigated without the deep European economic integration, but they would have happened nonetheless.
Forget about the money for a second. The fog of economic turbulences has clouded our eyes when it comes to the original idea: creating a mutually stabilizing club of democracies. The legitimacy of the European Union itself is at stake, if it transforms into a mixed bag of democracies, semi-democracies, and outright autocracies in the near future. Like the United Nations such an EU would suffer tremendously from the most basic disagreements on fundamental human norms. Just think of the fact that Saudia Arabia gets to chair the UN Human Rights Council panel. However, unlike the United Nations, the EU would still consist of a much deeper level of political integration, of shared areas of competences and common institutions.
Therefore, it is not an exaggeration to think that the current crisis in Hungary and in several other European countries poses the most existential threat to the EU since its existence. Forget about the money, this is about basic freedom, democracy and rule of law. This is about the reason why the EU was called into existence.