For years, Hungary has been a political problem child of the European Union. When Prime Minister Viktor Orban took office in spring 2010 with a two-thirds majority, he transformed the country in ways that were in conflict with many of the EU's core values.

Since then, Hungary's relations with the bloc and its member states have continued to deteriorate. And so have relations with Germany - Hungary's most important economic partner - and formerly also Hungary's most important political ally.

German Chancellor Angela Merkel's trip to Budapest on Monday is her first visit since Orban took office. Observers say her stop-over in Hungary is linked to the crisis in Ukraine and EU sanctions against Russia.

As a member of the EU, Hungary has so far grudgingly agreed to imposing sanctions, but made a point to stress that it is against the practice. Orban has repeatedly said that these sanctions hurt Hungary's economic interests as well as those of the European Union and don't have the desired political effect.

"That's why Merkel's visit is a sort of test," said former diplomat and foreign policy expert Attila Ara-Kovacs. "The Chancellor wants to test the waters and see how far Orban is prepared to go and whether she can control him."

Some liberal Hungarians look to leaders of other EU member states to oppose Orban

Deals with Putin

And it's not just about the highly controversial issue of sanctions, but about Hungary's look-east policy in general. In order to reduce being economically dependent on the EU, Orban has been pushing for intensified relations with Russia and China, as well as Azerbaijan, Turkmenistan and Kazakhstan.

Russia is a key player here: Last year, Orban and Putin agreed on a loan worth ten billion euros ($11.34 billion) to expand the nuclear power plant in Paks, south of Budapest. In a speech last summer, Orban praised Russia as a model of success and announced plans to build "an illiberal state, a non-liberal state." Recently, Orban said he wanted non-governmental organizations, which operate in Hungary and get funding from abroad, to undergo a special registration process - as in Russia.

Foreign-policy poker?

And just two weeks after Merkel's visit, Russian President Vladimir Putin is expected in Budapest. According to Hungarian government spokesman, Zoltan Kovacs, the two heads of state will be discussing Hungary's energy policy. In addition to finalizing details on the secret agreement of the nuclear power plant expansion, they will also negotiate a new contract on Russian gas exports to Hungary.

Russian money will help expand Hungary's nuclear power plant in Paks

Topics such as democracy and human rights in Russia are regarded as matters of internal affairs and would not be addressed, he added.

Putin's visit in Budapest doesn't mean that Hungary would question its European and transatlantic responsibilities in any way, the spokesman added.

But that's exactly what Putin wants to achieve, said Hungarian sociologist Pal Tamas, an expert on Russian-Hungarian relations. "According to Russian state philosophy, Orban is like the Biblical Jonas who was swallowed by the whale - in this case, by the EU - and who is giving signs from within the whale's belly," Tamas said. "And since there are other small ones inside the whale, Orban's signs could encourage them, too. This would be to Putin's liking."