The European Commission, the executive arm of the European Union, has criticized judiciary reforms by the Hungarian and Polish governments as a "major source of controversy" and "serious concern."
The commission made its assessment in its first report about failings in the rule of law across the bloc released on September 30, a day before the bloc's 27 EU leaders gather in Brussels for a two-day summit.
It said Hungary was among member states where "the direction of change has given rise to serious concern about the impact of reforms on judicial independence," while "Poland's justice reforms since 2015 have been a major source of controversy."
Hungarian Justice Minister Judit Varga quickly dismissed the report in a statement on Facebook, calling it "flawed" and "unfounded."
Warsaw and Budapest have repeatedly clashed with EU leaders over their moves to increase state control of the judiciary, media, nongovernmental organizations, and academia.
The 2020 Rule Of Law Report addresses justice systems, anti-corruption frameworks, media freedom, as well as other checks and balances.
It said that in Hungary, the prosecution of high-level corruption "remains very limited," while the absence of legislation and transparency in the distribution of state advertising has opened the door for the government to "exert indirect political influence over the media."
The Commission's vice president, Vera Jourova, told RFE/RL, "It’s a big pity Hungary didn’t join the new European Public Prosecutor’s Office (EPPO)," a new EU body tasked with fighting corruption and fraud in the 27-member bloc. So far, 22 EU member states have joined the Luxembourg-based EPPO, expected to be up and running at the end of the year.
The report comes after the European Commission earlier this week rejected Hungarian Prime Minister Viktor Orban's demand for Jourova to be dismissed or resign after she said his vision of "illiberal democracy" was in fact spearheading the creation of an "ill democracy" in Hungary.
"I don't have any personal experience in resignations. I am not going to resign. If I resign one day, it will be because I will feel myself that I am not able to do the job properly, which is not the case today," Jourova told RFE/RL.
She also said that there should "definitely be space for independent media in Hungary," where media outlets critical of Orban have been muted or acquired by entities with ties to the government.
Bulgaria and Romania are also among the countries criticized in the report for shortcomings in ensuring judiciary independence.
The commission also called out Bulgaria for threats against journalists and the lack of transparency of media ownership.
Jourova reiterated to RFE/RL that the media situation in Bulgaria was "not rosy."
She spoke about "a trend in many member states where the media situation is worsening from the economic point of view, job security, and political pressure."
Jourova reiterated the importance of an independent media for democracy. "When they do their job right, the media are the defenders of democracy and freedom of speech," she told RFE/RL.
The report could have repercussions for negotiations on the bloc's long-term budget.
While EU leaders have agreed in principle on a 1.8 trillion-euro ($2.1 trillion) economic recovery package for 2021-27, they have yet to find common ground on a distribution mechanism.
Reports say that a majority of the EU's 27 countries have approved a proposal over how to make payouts from the bloc conditional on upholding the rule of law -- a move opposed by Poland and Hungary.
"The rule of law and our shared values are the foundation of our societies," European Commission President Ursula von der Leyen said on September 30.
"They are part of our common identity as Europeans. The rule of law protects people from the rule of the powerful. While we have very high rule-of-law standards in the EU, we also have various challenges," she added.