The year we have left behind us started in an atmosphere of irrationality. More or less every member of the political elite knew that the number of lies was running out of control. Oddly, if logically, the reason for this was that the government that took office four years ago did something no government had ever done before: it carried out its electoral promises. This created the budget deficit that transformed the way the truth was stretched to serve domestic political ends. Before, politicians had lied out of habit, while the people regularly replaced the government of the day with its opposition. They knew that even if less than half the manifesto promises were genuine, things would go on as they had before, and nobody would lay a finger on the gradually calcifying social security system we inherited from the Kadar regime.

Now, however, things have got much more serious. It's no longer about the welfare Canaan we were promised being just another deceptive mirage. It's about taking back those benefits that were previously handed out. The welfare state was brought down by attempts to bring it about. The Soviet Union collapsed by arming itself to death. The the prematurely born post-Socialist welfare states were spent to death by infantilisingly populist political parties. The unmasking of these lies will, we hope, help fledgling citizens to act in the supermarket of democracy not as a screaming child demanding sweets and toys, but as a sophisticated consumer.

It sounds grotesque, but Hungary's stumble will probably serve us well in the long run. It will set off down the road towards becoming a sensible, adult state governed by the rule of law. We'll still see tribal gatherings of political extremists hoisting banners, tearing up paving slabs and setting this on fire. And the police will do their business, disrupting the crowds, arresting the turbulent elements. But it will be marginal - and nobody will respond with visions of storm troopers threatening democracy, whipped up into a frenzy by the leader of the Opposition, and nor will they have nightmares about police terror and the spectre of people's democracy. A few outraged crypto-Arrow Crossers do not constitute a wave of brownshirts, and nor do a few outrageous, unprincipled and hushed-up police excesses match up with Rakosi-style dictatorship.

That was how we spent the year. Happily busy with ourselves, we didn't much notice what was happening abroad. Yet if catharsis dominated our year, fundamentalist horror made the running out there. Self-appointed leaders of horrifying states - Korea, Iran - are knocking on the door of the nuclear club. The latter of the two has been financing the Islamic militia that has been lobbing missiles into the territory of the Middle East's only democracy, while on the other side of the world Hugo Chavez has been spreading like decay in a tooth.

Democracy in Iraq was stillborn. The collapsing cradle of humanity is being carved up by local tribal and clan leaders, its political sociopaths now targeting less the US's troops than each other - and millions of innocent Iraqis.

What we don't see doesn't hurt - us. Only those who were murdered and tortured by the executed eastern despot. Dictators only reap their rewards when they have done to them what they did to their victims. When we deny them the something that European civilisation has declared an inalienable right - their lives.

The caricatures of the founder of Islam kicked much of the Muslim world into a state of panic. Much of our press muttered nervously, instead of immediately commissioning a series of caricatures of Jesus and Moses, thus proving that we do not discriminate, we will satirise anybody. And if this weren't enough, during 2006, we discovered that we're in serious trouble. First Kiev, then Georgia and now the population of Belarus is learning who's in charge of the gas taps.