BRUSSELS (AP) — The European Union’s highest court ruled on Wednesday that the 27-nation bloc can link financial backing for member states to respect for rule of law and that a challenge by Hungary and Poland should be dismissed.

The right-wing governments of both nations had argued that such action lacked a proper legal basis. Both nations, large recipients of EU funds, have come under increasing criticism over the past few years for veering away from the Western principles of the respect for democratic values in their nations.

“The full court dismisses the action,” a statement read out by the judge said.