The Greek team actually created the first chances of the match when Adamantios Chouchoumis' left-wing free-kick flew just over the bar and Nikolaos-Iakovos Giannitsanis' low drive soon after was safely gathered by István Hernádi in the Honvéd goal.
However, the 2010 champions soon asserted themselves on the game and their first came after 16 minutes when Nikola Pantovic fashioned space down the right channel and crossed deep from the byline for Karacs to head in at the back post.
Pantovic was causing havoc amongst the Panathinaikos defenders and he soon troubled them again, this time getting around the back of them on the left and advancing towards goal but he elected to shoot instead of passing from a tight angle and Panathinaikos goalkeeper Alexandros Anagnostopoulos was able to divert the ball behind for a corner.
The team from Athens were still very much in the game though and spurned a golden chance to equalise when Hernádi pushed out Ilir Kastrati's header from point-blank range. Two minutes later Honvéd threatened with a header of their own but Endre Botka's header from Attila Lőrinczy's left-wing cross cannoned back off the crossbar. As play swung from end to end Honvéd again went close through Filip Holender but his run and shot was palmed away by Anagnostopoulos before it was Pana's turn to hit the woodwork, Kyriakos Andreopoulos unleashing a 30-metre piledriver which rebounded off the bar with Hernádi beaten all ends up.
It seemed Honvéd would take a slim one-goal lead into the break but suddenly they were gifted a chance to score a second in the final minute when Kastrati brought down Pantovic as he was about to shoot, Karacs stepping up to score his and his team's second with a confident penalty kick into the right corner of the net.
Pana now had a mountain to climb but as in the first half they were the first to threaten after the break, but Christos Donis' unmarked header from a Chouchoumis corner flew wastefully over the Honvéd goal. They'd be left to rue these missed chances as the unfortunate Kastrati conceded a second penalty of the afternoon, upending Lőrinczy who then dusted himself down to repeat his teammate Karacs and send the ball into the right corner of the net for a 3-0 lead.
In the 66th minute Honvéd made it four when captain Péter Szilvási flicked a corner goalwards with his head and once Anagnostopoulos blocked it the finish was applied by defender Marcell Machalek four metres from goal. Pana did strike back immediately though to bring a modicum of respect to the final scoreline, Giannitsanis' right-foot finish from inside the Honvéd penalty area bouncing in off the far left post to make it 4-1.
Panathinaikos won the customary penalty shootout held in the event of a tie on points between teams at the end of the group stage, but this was already irrelevant; Pana must fight for second place against Ferencváros tomorrow and Honvéd will contest Monday's Final!
Honvéd: Hernádi, Machalek, Csorníj, Szilvási (c), Karacs (Kiss 64'), Lőrinczy (Borgulya 77'), Pantovic, Csemer, Holender (Prosszer 41'), Balogh (Farkas 64'), Botka (Kállai 69').
Goals: Karacs 16, 40; Lőrinczy 55, Machalek 66.
Yellow Cards: Balogh 29; Kállai 77.
Panathinaikos: Anagnostopoulos, Fafoutis (Vosdou 61'), Donis (Ymerai 64'), Andreopoulos, Chouchoumis, Giannitsanis, Mouzakitis, Marathianos (Ntagras 54'), Anastasopoulos (Stamatakis 64'), Risvanis (c), Kastrati.
Yellow Cards: Fafoutis 5'; Giannitsanis 30'; Kastrati 55'.
