The Central European University will move from Budapest to Vienna | Attila Kisbenedek/AFP via Getty Images Hungary passes bill targeting Soros-funded university Protests in Budapest and strongly-worded US response.

BUDAPEST, Hungary — Against the backdrop of continued protests in Budapest, the Hungarian government Tuesday passed a fast-tracked bill that critics have described as an attack on academic independence.

The Central European University (CEU), founded by the billionaire American-Hungarian financier George Soros, won't be able to operate under the new rules, which will prevent the Budapest-based institution from granting both U.S. and Hungarian degrees.

“We have no idea what will happen now,” said Aiski Ryökäs, a Finnish master’s student at CEU who was demonstrating at the university on Tuesday. “I didn't think the university would be targeted.”

According to the new law, if CEU does not fulfill the requirements as of January 1, 2018, after this date no new students may be enrolled. However, programs which have started before January 1, 2018, may be completed with the current conditions in the academic year of 2020/21, the latest.

The government-sponsored bill passed despite significant foreign and domestic criticism, including a strongly-worded statement from the U.S. Embassy in Hungary and days of protests in Budapest.

"The United States is disappointed by the accelerated passage of legislation targeting Central European University, despite the serious concerns raised by the United States, by hundreds of local and international organizations and institutions, and by thousands of Hungarians who value academic freedom and the many important contributions by Central European University to Hungary," the U.S. statement said.

During a short parliamentary debate, members of the ruling Fidesz party portrayed the new measures as a fight for national sovereignty. In recent months, the government has become increasingly hostile to Soros, designating him as an enemy of Hungary.

The university’s leadership is arguing that the law is discriminatory and is planning to fight for its survival.

“We will challenge the constitutionality of this act,” CEU President Michael Ignatieff told reporters on Tuesday, via video link from Washington where he is meeting with members of Congress and State Department officials.

The Hungarian government rejects that this is a witch hunt aimed at Soros or independent institutions.

“The sole aim of the amendment to the Act on Higher Education is for foreign universities in Hungary to operate lawfully and transparently by complying with Hungarian regulations,” the Hungarian government said in a statement to POLITICO. “Any other interpretations are symptoms of political hysteria.”

CEU is currently accredited in Budapest and New York and the Hungarian government is insisting on negotiating with Washington, despite the fact that the federal government does not have jurisdiction in the matter.

“The future of the ‘Soros university’ depends on American-Hungarian intergovernmental negotiations,” Prime Minister Viktor Orbán said Friday in his weekly radio address.

CEU plans to ask Hungary’s President János Áder not to sign the new bill into law. University officials have also indicated they are open to negotiation with the government as long as that would guarantee its independence.

Members of Hungary’s opposition, however, have little faith that a solution can be found.

In parallel with the move against CEU, there has been a crackdown on NGOs.

According to a new draft bill on foreign-funded NGOs, which was leaked to Hungarian media, civil society groups that receive more than 7.2 million forints (€23,289) per year from foreign sources will be added to a new registry. Groups on the list will be required to self-identify as a foreign-funded group on every press release, leaflet, website and report they produce, and failure to comply may lead to the closure of the NGO.

“There are self-styled human rights organizations which engage in political activity, but which have no political legitimacy, and whose activities are in sharp opposition to the views of the majority of Hungarians. On several occasions they have also encouraged law-breaking by certain groups of people,” the Hungarian government told POLITICO.

“Let’s not mince words: George Soros finances these organizations,” Orbán said on March 17.

Publishing a "foreign-funded" label would mean “we have to have to bear a stigma,” said Márta Pardavi, co-chair of the Hungarian Helsinki Committee, a group that is funded by the European Commission, the U.N. High Commissioner for the Refugees, and the Soros-backed Open Society Foundations, among others. “Foreign-funded is equated with anti-Hungarian” in government parlance, she added.

At the same time, a new draft bill introduced late last week will impose a 9 percent tax on media advertising, raising worries about intensified government pressure on the country’s few remaining independent media outlets.

The Orbán government is “taking advantage of an opportunity,” said Pardavi. “Within the European Union and European Commission, there is less willingness to take action or speak up because they are waiting for the elections” in France and Germany, she added.

Orbán’s government also appears to expect less pressure from this American administration on issues related to democracy and the rule of law. Speaking in Washington in late March, Foreign Minister Szijjártó said that American “intrusion into Hungary’s internal affairs” has ended, noting that “America’s new approach to Hungary is much more constructive.”

The strongly-worded statement from the embassy, however, suggests that the government may have miscalculated.