And yes, the way a few member states are democratically developing (Hungary and Poland) are a real problems.
Frankly I do understand why Hungary and Poland are reacting the way they do, because the EU is practising double standards.
Just look at Spain, how Spain is oppressing the indepence movement, people are jailed for nothing and even the Spanish government acknowledged that. And what does the EU do because of this? Nothing.
On the other hand Poland and Hungary are getting quite much blame, might be that there are some bad developments there, but they are definitely having no political prisoners like Spain has. But Hungary and Poland are in the public focus, not spain.
The problem now with the mechanism the EU wants to implement to guarantee the rules of law is that
a) it lacks objective criteria how to identify when a state abandon this road and
b) has many ways on how to make the decision that one member state is violating the rules of law, which as consequence would mean that these "rogue" states don't get payments from Bruxelles.
These decisions should be made by a qualified majority, which is 15 of the 27 member states must approve it and these supporters must have at least 65% of the EU's total population.
So this means that the bigger you are, the more likely it is that you will not have to face such a decision. On the other hand it makes it far more easier to punish Poland and Hungary in return.
Poland and Hungary fear that they might become the next Greece, which by now is more like a third world country than anything else thanks to austerity. They also know that despite all nice words out of Bruxelles and despite what they might do and even if they are just behaving like model students that there will be always something which can be constructed to initiate such a decision against them. And that's what they really do fear, and so their veto is in self defense to avoid that.
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