Governments interfering with courts or going easy on corruption will risk being stripped off EU funds, according to a draft law which practically means suspending commitments, interrupting payment deadlines, reducing pre-financing and suspending payments.
"It has been painfully clear for years already that the present available legal mechanisms in the Union do not stop governments on this dangerous path," said Finnish MEP Petri Sarvamaa.
"In order for the Union to protect its financial interest from the risk of financial laws caused by generalised deficiencies as regards the rule of law, the Union should be able to impose appropriate measures that include restricting, reducing or even suspending access to EU funding".
This comes a few months after the European Parliament voted to trigger Article 7 disciplinary procedures against Hungary for undermining democratic rules.
Article 7(1), as triggered against Hungary, means a formal warning is given to the state.
If this doesn’t have the desired effect, Article 7(2) can be used to impose sanctions and suspend EU voting rights.
And Fidesz MEP Tamas Deutsch has many reasons to be against the Parliament's proposal.
"Whatever happens, the EU cannot adopt a decision whereby it adopts measures that go against the rule law in the name of protecting the rule of law.
The Commission proposal is bad and has been worsened by the parliament."
MEPs are now ready to enter negotiations on the final wording of the draft law with the EU ministers, who have not clarified their position yet.