BRUSSELS (AP) — Democratic standards are facing “important challenges” in some European Union countries, particularly in Hungary and Poland, where the judicial systems are under threat, the EU’s executive commission said Wednesday in its first report on adherence to the rule of law.

The European Commission depicted a bleak situation in the two countries. Its wide-ranging audit found that prosecution of high-level corruption in Hungary “remains very limited,” and deemed Poland deficient in the four main areas reviewed: national justice systems, anti-corruption frameworks, media freedom and checks and balances.

“It is relevant to have an overview of these issues, and see the links between them. Not least because deficiencies often merge into an undrinkable cocktail,” EU Values Commissioner Vera Jourova told journalists.

The report, published a day before the leaders of the EU’s 27 nations meet in Brussels for a two-day summit, could have repercussions for discussions on the bloc’s long-term budget.

While EU leaders have agreed in principle on a 1.8 trillion-euro economic recovery package for the 2021-2027 budget period, they have yet to find common ground on how to distribute the money because many countries insist that allocations should be linked to respecting the EU’s rule of law standards.

Poland and Hungary, which believe they are being unfairly targeted, are opposed to the idea. The EU has accused the two countries of violating rule-of-law standards for years and is pursuing sanction procedures against them.

Hungary immediately dismissed the report as irrelevant and biased.

“The Commission’s Rule of Law Report is not only fallacious, but absurd,” the Hungarian government said in a statement. “The concept and methodology of the Commission’s Rule of Law Report are unfit for purpose, its sources are unbalanced and its content is unfounded.”

Polish Prime Minister Mateusz Morawiecki made no reference to the report while presenting his new cabinet on Wednesday, while Poland’s liberal opposition, the Civic Coalition, stressed that the report was critical of the right-wing government, but not of the country itself.

“It is the current ruling team that is rated so low in the report and it’s Law and Justice (party) that is responsible for all the problems that the European Commission is referring to now,” said Civic Coalition lawmaker Kamila Gasiuk-Pichowicz.

The EU report also called out Bulgaria, Croatia, Slovenia and Spain for threats against journalists, and threats, attacks and smear campaigns against journalists were also reported in Hungary. Bulgaria also was cited for a lack of judicial independence and an inability to tackle corruption cases properly.

Bulgarian officials reacted along party lines. While government officials called the report an appreciation of Cabinet efforts to stem corruption, opposition lawmakers said the EU’s conclusions demonstrated that the government lacks the political will to implement needed reforms.

“The report is positive, objective and clearly outlines the results of cooperation with the EU,” Minister of Justice Desislava Ahladova said.

The left-leaning country’s president, Rumen Radev, who has been a vocal critic of the government and supports the three-months long anti-corruption protests in Bulgaria, had a different perception.

“They should have come earlier,” he said of the report’s findings.

The sticking points in Poland are the right-wing government’s moves to take control of the justice system, especially the judiciary. The report says “the double role where the minister of justice is also the prosecutor general has raised particular concerns, as it increases the vulnerability to political influence.”

In Hungary, government-sponsored laws targeting media freedoms, minority rights, the electoral system and academic and religious freedoms drew the commission’s notice. The EU report also criticized a “consistent lack of determined action to start criminal investigations and prosecute corruption cases involving high-level officials or their immediate circle.”

In an interview last week with Germany’s Der Spiegel magazine, Jourova said the report highlighted an “alarming” picture, and she accused Hungarian Prime Minister Viktor Orban of “building a sick democracy.”

The story triggered Orban’s anger. He said Monday that Jourova’s statements humiliated Hungary and asked for her resignation, but EU officials have offered their overwhelming support to the commissioner.

“As I grew up in communist Czechoslovakia, I know how it feels to live in country without the rule of law,” Jourova said. “The European Union was created also as an antidote to those authoritarian tendencies.”

The commission also looked into government measures that have limited personal freedoms during the coronavirus pandemic and noted that “reactions to the crisis showed overall strong resilience of the national systems.”

The commission will next debate the report with the European Parliament and EU nations.

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Pablo Gorondi in Budapest and Monika Scislowska in Warsaw contributed to this report.

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