THERE was once no brighter star in Europe. Since shaking off communism in 1989 Poland has rivalled the bounciest Asian tigers in GDP growth. It has become a vital NATO ally. But it is also on the front line of what France’s president, Emmanuel Macron, calls a “European civil war” over the rule of law.

The optimism that attended the EU’s great eastward expansion in 2004 has given way, in some places, to angry, nationalist “illiberal democracy”. In Hungary, having nobbled the courts, media and public prosecutor, Viktor Orban is squeezing civil society and using state (and EU) funds to nurture oligarchs. Romania’s leaders endlessly seek to weaken anti-graft laws that might otherwise ensnare them.

But the gravest challenge is in Poland. Since taking office in 2015 the nationalist Law and Justice (PiS) party has stacked the courts, skewed public media and stuffed the bureaucracy with supporters (see article). Its judicial reforms flagrantly violate EU treaties. That matters not only for Polish democracy: EU countries have to trust each other’s courts to uphold the law that underpins the single market. So last year the European Commission invoked Article 7, an untested instrument that obliges governments to assess whether one of them is systematically undermining the rule of law.

In theory Article 7 can strip an offending country of its EU voting rights. In practice the unanimous vote that it requires is impossible to secure, partly because illiberal governments protect each other. So the commission is eyeing the EU budget, much of which is spent on transfers from rich countries to poorer ones. The last seven-year budget granted Poland nearly one-fifth of the EU’s cohesion funds. That looks like leverage.

Negotiations over the next budget begin in May. It can be harnessed in two ways. One, other member states can take a tough line with Poland in the haggling ahead. Parliaments in countries like Germany and the Netherlands already find it galling to send so much of their taxpayers’ cash to governments that flout the rules. A second idea is to establish a way to suspend payments to governments that violate the rule of law.

The EU faces a dilemma. Go soft on PiS’s leader, Jaroslaw Kaczynski, and Europe’s next would-be autocrat will be emboldened. But pushing too hard risks bolstering PiS’s claim that meddling outsiders are undermining Polish democracy. As the giant of eastern Europe, Poland matters. The EU’s growing east-west cleavages over migration and money cannot be healed if it is sent out into the cold.

A flicker of hope

Perhaps prodded into action by the coming budgetary talks, PiS has lately tweaked some of its judicial reforms. The changes, on matters like judges’ retirement ages, are the first signs of compromise since 2015. But they are largely cosmetic. The EU should (quietly) insist on much more before it considers lifting Article 7. Poland’s rulers must take steps to revive the rule of law, starting with the restoration of improperly fired judges on the constitutional tribunal. If PiS does not budge, the commission should be creative with the budget. Poland receives three times as much from EU funds as it pays in, and those subsidies go disproportionately to PiS’s rural supporters. They need to understand that they cannot enjoy the benefits of a club at the same time as they trample on its rules.

This week Mr Macron repeated his call for a “hard core” of EU countries to pursue integration if others ignore their commitments. Poland’s government says it does not want to be left behind in Europe’s slow lane. But if it continues to undermine independent institutions and violate the rule of law, that is what will happen.