Targeted, but not named, were Hungary and Poland, countries that receive massive subsidies from the EU budget, but flout calls by Brussels to meet commitments on fundamental freedoms.
"The time has come to accelerate the fight against the erosion of democracy, the rule of law and fundamental rights in the very heart of the EU,” said the letter, signed by leaders from the centre-right, centre-left, centrist and green parties.
The letter was addressed to Chancellor Angela Merkel of Germany, which currently holds the EU’s rotating presidency, as well as Ursula von der Leyen, the head of the commission, the EU’s executive arm that hands out the cash.
Unless there are changes, the European Parliament has already vowed to veto the multiyear, 1 trillion-euro budget — along with a massive pandemic recovery fund — that was thrashed out between heads of government at a summit in July.
Parliament members are due to sit down with representatives from the member states on Thursday to seek a compromise, with MEPs insisting on stricter conditions around civil rights.
The summit deal in July was seen by some as not putting enough pressure on countries to respect core EU values, especially after Hungarian Prime Minister Viktor Orban hailed a "huge victory” against conditionality after the talks.
In their letter on Wednesday, the MEPs insisted that EU member states approve a parliament proposal from April 2019 which would firmly link EU spending to the rule of law, which they vetoed at the time.
Without its formal approval, "it will be impossible for us to move forward” on the EU budget, the group leaders said.
The EU budget is deeply intertwined with the 750 billion euro post-virus recovery fund, that parliament does not have a say over.
But given the historic recession afflicting Europe, member states are under huge pressure to implement the plan and the budget as soon as possible, hopefully by the end of the year.
Recent events in Hungary and Poland suggest the countries have little intention of addressing EU concerns over attacks on media freedom and the independence of the courts.
A day after the summit in July, the editor of Hungary’s top independent news site was fired, seen as another sign of the Orban government’s attacks on opposition media.