To democrats concerned about authoritarian drift in some eu member states, it sounded like a bad joke: poland and hungary, whose nationalist governments have unpicked constitutional checks and balances, this week announced they would set up an institute for the comparative study of the rule of law.

If anybody is laughing about the eus pusillanimity over democratic backsliding, it must be hungarys viktor orban and his ultra-conservative soulmate jaroslaw kaczynski, polands de facto political leader, who took charge of the judicial overhaul this week as deputy premier.

The two have neutered their courts and reduced media pluralism or are in the process of doing so. hungarys democratic slippage is more advanced, but warsaw is on the same path. yet the eu is failing to use its few existing powers and struggling to develop new ones to protect the rule of law.

For years the bloc has been incapable or reluctant to stop autocratic governments from entrenching their power. the so-called article 7 procedure which can ultimately lead to an offending country losing its voting rights is all but redundant, since one member can block punishment of another. warsaw and budapest can protect each other. mr orban has also enjoyed political protection from europes centre-right political family, of which his fidesz party is still a member.

Since ursula von der leyen became president of the european commission with the support of warsaw and budapest, it has taken a more conciliatory approach. every member state, not just a few in the east, is now subject to an annual rule of law health check. ms von der leyen told meps last month that the report would be a starting point... to ensure there is no backsliding.

Presenting this as a new problem is like installing a fire alarm when the building is already ablaze, says daniel kelemen of rutgers university.

The report itself mostly a recap of what is already known has the merit of underlining the systemic nature of the democratic regression in hungary and poland. the question is whether it will serve as a basis for action.

Brussels has seemed reluctant to take errant states to the european court of justice by contrast, it moved swiftly against the uk over breaches of the brexit withdrawal agreement. infringement proceedings can be slow and piecemeal but are effective or at least they were.

In a landmark ruling last november, the ecj ruled that a special chamber set up by poland to discipline its judges was contrary to the principle of judicial independence. however, the polish chamber still appears to be pressuring judges, including those upholding eu law. as a group of legal scholars point out, warsaw is at the point of no return and should be fined by the court for its defiance.

With so few tools, it is no wonder that the commission, parliament and most member states wanted to create a new instrument through the eus forthcoming 750bn coronavirus recovery fund. in july, eu leaders agreed to suspend payments to countries where there were generalised deficiencies in the rule of law.

But when germany, holder of the eus rotating presidency, this week turned the formula into a draft regulation, the mechanism had been watered down. suspension of payments would be less automatic and for specific breaches that affected eu funds.

The recovery fund needs to be ratified by every member state and berlin wants a rapid agreement so that money can be disbursed quickly to support europes economic recovery. the pressure will be intense on meps not to toughen up the safeguards and risk a hungarian or polish veto.

But, says katarina barley, a former german justice minister from the centre-left and now vice-president of the european parliament, this is a decisive moment for the eu. if we dont link the huge amount of money we are distributing now to the rule of law, how will we ever do it again? she asked.

These governments only want one thing from the eu and that is money. this is the moment to grab them.