The EU has been trying for years to get some countries to respect basic rules like media freedom and independence of the judiciary without success and "rule of law" is one of the buzzwords of this week's summit.
One of the proposals on the table at talks is to cut funding to countries found breaching rule of law principles. The tool would include new voting measures so countries like Hungary or Poland could not easily veto the move.
"The proposal of the Commission is to work with the reversed qualified majority. It will be maybe an important part of the discussion in the Council," says Didier Reynders, European Commissioner for Justice.
The Reverse Qualified Majority method for voting means that the rule will go ahead unless a qualified majority of Member States overturns it.
"If we are staying with the qualified majority or more than that, with unanimity, it will be very difficult to have a result," he adds.
The proposal is facing fierce resistance from Poland and Hungary. The Parliament in Budapest even adopted a resolution this week banning the government from signing up to any rule of law conditions in Brussels.
"In a vague, undefined procedure, they want to link the disbursement of money, not to European values, but to the political demands of the EU's globalist, anti-immigration, anti-national, anti-traditional and increasingly destructive political elite," László Kövér, speaker of the Hungarian national assembly, said on Tuesday.
But the EU's Justice Commissioner is optimistic a deal on the rule of law package will be reached.
He says that all negotiations have a starting point and a compromise must be found.
"So it may be possible to have a trade-off between the needs to react to the crisis with the recovery and reconciliation facility, but also do that in a full respect for the values."
The commissioner said there is growing pressure for a rule of law conditions not only from the Commission, but from the European Parliament and many member states.