On March 11, Orbán’s ruling centre-right Fidesz party used its unprecedented two-thirds parliamentary majority to pass constitutional laws that critics say limit citizens' freedoms.
Decisions of the country's top Constitutional Court made before the new constitution entered into force in 2012 will no longer be valid, discarding an important body of law often used as reference before.
Restrictive new regulations may now appear in higher education, homelessness, electoral law and family law, critics fear.
Press conference was a crowd-puller
Orbán understood that, since the issue was not on the agenda of the summit, the only chance of it impinging was before the start of talks, when the Parliamentary president addresses EU leaders.
He therefore convened a press briefing for mid-afternoon, in a move apparently aimed at pre-empting the Schulz attack.
To a packed room of journalists for whom Orbán constituted the only mid-afternoon attraction, the Hungarian leader repeatedly rebuffed criticism of his reforms, and rejected criticism in a letter sent by the foreign ministers of Denmark, Finland, Germany and the Netherlands.
The letter (sent 13 March) called on the EU to consider faster action to be taken by the EU “when the rule of law is flouted”.
Saying he was glad to see so many journalists “all eager and fired up”, Orbán added: “All your questions on democracy were raised two years ago. I know you feel it's like déjà vu. I feel that too." He was referring to events of late 2011 and early 2012, when constitutional changes in Hungary similarly led to calls for sanctions (see background).
"The constitutional process is transparent in Hungary… the Hungarian parliament has not limited the powers of the court," Orbán insisted.
He dismissed concerns voiced in the German Parliament, saying: “I have noted the German Parliament is discussing Hungary. I have sent Merkel a letter… there's not a single concrete point in Merkel's ‘concern’.”
Shortly afterwards, Schulz concluded his meeting with heads of state and addressed journalists, hitting back at the Hungarian prime minister.
Constitutional changes go against the rules
Schulz said he thought considering the use of Article 7 sanctions suitable, and said that Hungary would be discussed by Parliament on 17 April “at the request of all political parties”.
"Orbán says that Hungary never interferes with other countries' domestic affairs, but I think he has misunderstood something. Changing the Constitution the way he wants to do it goes against the common community rules," said Schulz.
However, Schulz acknowledged that during his address to leaders, only the Commission President José Manuel Barroso had backed him up.
Subsequently diplomatic sources said that – despite the fracas – the pair remain good friends. Another source said that Barroso’s intervention before the leaders on the subject had been relatively mild, and added that Barroso had noted that some changes had been made to the constitutional law changes since the Commission first registered disquiet, on 8 March.