Brussels is considering new mechanisms to ensure EU states adhere to democracy and the rule of law and avoid any repeat of the worrying reversals seen in countries such as Hungary and Romania.

The move follows the European parliament’s adoption last week of a hard-hitting report accusing Hungary of rolling back democratic checks and balances, and urging concerted action against it by EU institutions.

Adoption of the report has taken tensions between the EU and Hungary to a new high. Viktor Orban’s Fidesz government accused the EU of meddling in its sovereignty, likening it to the Soviet Union.

Hungary’s parliament passed its own motion declaring “we had enough of dictates during the 40 years we spent behind the Iron Curtain”.

Officials at the European Commission, the EU’s Brussels-based executive, say they do not plan to adopt all the European parliament’s proposed measures specifically against Hungary. But commissioners will on August 28 discuss ways of enforcing observance of fundamental values set out in the EU Treaty.

The discussion will include measures proposed by the parliament, such as a “Copenhagen Commission” of independent experts to conduct constant monitoring of all EU states to guard against democratic backsliding. The so-called Copenhagen criteria are standards on democracy and fundamental rights that all aspiring EU members must meet.

The commission will also consider broadening sanctions available against countries falling short of democratic standards, to include potentially withholding EU funds.

The discussion reflects a realisation that progress on democracy and human rights cannot be assumed to be irreversible. There are high-level concerns that Europe’s economic malaise, with unemployment and political extremism rising, could threaten democracy – and that Hungary may be just the first case.

“Everybody is very aware that we may be heading for a fundamental rights and rule of law crisis in the EU, which has a very disruptive potential – particularly because it comes on top of the eurozone crisis, of an economic and social crisis,” said Rui Tavares, author of the European parliament report on Hungary. “The EU is not well enough equipped to deal with disruptions to its principles and values.”

José Manuel Barroso, commission president, and vice-president Viviane Reding are both anxious to bolster the EU’s democratic defences with “new tools”, say people familiar with their thinking. But they are wary of the commission being seen to victimise particular countries such as Hungary.

Addressing the European parliament last week, Ms Reding said the debate on the rule of law was of “high importance” but “should not be shaped exclusively by our experiences with . . . Hungary”.

Ms Reding has also called a conference for November bringing together other EU bodies as well as senior policy makers, judges, lawyers and experts.

Though measures may ultimately be adopted on an EU-wide basis, Hungary is likely to be their first target – setting the stage for bitter clashes. Analysts say Hungary’s firebrand premier bitterly resents any kind of monitoring.

Hungary’s parliament motion, put forward by members of Mr Orban’s Fidesz, said the Tavares report “arbitrarily defines requirements, arbitrarily introduces new procedures and creates new institutions which stand in violation of Hungary’s sovereignty guaranteed in the EU Treaty”.

Mr Orban himself used the analogy of the Soviet Union, telling a radio interview: “Since the rule of the Soviet empire, no other external power has dared to try to curb the sovereignty of Hungarians openly.”

The Fidesz government has alleged the report resulted both from a socialist-led conspiracy against it and pressure from powerful west European utility companies on their governments after Mr Orban forced them to cut energy prices in Hungary.

But Gordon Bajnai, former prime minister of a left-of-centre technocrat government in 2009-10 and now an opposition leader, said Mr Orban’s clash with Brussels was “not about protecting Hungary but about protecting his oversized power – the power to build an eastward-looking crony capitalism and a managed democracy”.

“Such a system cannot be consolidated within the framework of the European Union,” he said. “However, this power can only be brought down by the Hungarian voters and not by any external influence.”

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