It is well known that Viktor Orbán has few friends in Brussels. Hungary's rule of law is not good under his leadership; on the Ukraine issue, the prime minister repeatedly swims against the tide (even against his former brothers in the spirit of the Polish PiS).
Nevertheless, it is not a good idea to deny Hungary its upcoming presidency of the EU Council of Ministers, as some in the European Parliament would like and for which there is apparently sympathy in the German government.
Article 7 is the way to go
There is a procedure for the withdrawal of Member States' rights in Article 7 of the Treaty. The fact that it requires unanimity benefits Hungary (and Poland) at the moment, but in principle it is the right way to go. Otherwise, it is easy to end up in a situation in which political differences of opinion alone lead to institutional deadlocks. The fact that not only the fundamental question of the rule of law, but also the country's attitude towards Ukraine is being cited against Hungary points in this direction.
Moreover, the Presidency should not be overestimated. It is important for practical work in Brussels. However, the EU Commission and the High Representative for Foreign Affairs play a major role, especially when it comes to sanctions, and in any case in terms of external impact. The (necessary) correction of the undesirable developments in Hungary should be left to the Commission.