France wants rule-of-law sanctions on recovery budget

"It is not possible to explain to French, Polish, Hungarian and European citizens that we can have financial solidarity in Europe without worrying about respecting the basic rules of democracy, freedom of the media and equal rights," he said.

Beaune said sanctions should entail both legal and financial consequences.

The comments follow the roll back of rights in Hungary and Poland, and amid on-going major corruption allegations at the highest levels in the Czech Republic.

Hungary and Poland had opposed rule-of-law conditions under the new recovery plans, agreed at a Brussels summit last month - in what critics say is a brazen attempt to maintain a stranglehold on the status quo.

EU member states had agreed to the recovery fund, along with the seven-year €1.1 trillion EU budget, over a marathon five-day summit.

The terms of the agreement weakened rule-of-law provisions that sought to hold member states accountable should some violate rights.

EU states are now set to hammer out, along with the European Commission and the European Parliament, how they intend to implement those provisions should governments stray.

The aim is to reach a cross EU institutional agreement before the end of the year.

But recent developments in both Hungary and Poland suggest the two countries have little intention of agreeing to any rules that may undermine or challenge their policies that curtail media freedoms or the rights of the lesbian, gay, bisexual, trans and intersex communities (LGBTI).

A day after the EU budget and recovery funds were agreed, the chief editor of Hungary's largest independent media outlet Index.hu resigned.

The resignation was triggered when a businessman allied with prime minister Viktor Orbán's government became a major shareholder in Index.hu's advertising company, while another one joined the website's management.

Around 80 other journalists at Index.hu also resigned in protest.

Some three-quarters of advertising by public entities is placed with pro-government media.

Meanwhile, Poland's government is entrenching its homophobic views as towns throughout the country declare themselves to LGBTI "free".

Last week, the European Commission rejected grants under a twinning programme for six Polish cities for their anti-LGBTI views.

"Our treaties ensure that every person in Europe is free to be who they are, live where they like, love who they want and aim as high as they want," said European Commission president Ursula von der Leyen on the issue.