LUXEMBOURG/BRUSSELS (Reuters) - European Union ministers began an unprecedented discussion on Tuesday of threats to the rule of law in Poland, urging Warsaw to step back from contested judicial reforms they say put its courts under more political control.

Poland’s ruling nationalists have refused more concessions over the sweeping changes, many already in place, which have been criticized by rights groups, the EU and domestic political opponents for flouting democratic checks and balances.

Poland is increasingly isolated within the bloc and is squandering its leverage, including in negotiations over the EU’s next seven-year budget from 2021.

But the ruling Law and Justice (PiS) party’s recalcitrance also highlights how the EU struggles to bring back into line member states that flout its central principles.

The executive European Commission has triggered a punitive procedure against Poland for weakening the rule of law, the first time it has used the provision. Tuesday’s meeting will see European affairs and foreign ministers from the other 27 EU states quiz their Polish counterpart.

“The Polish government has the right to reform the judiciary as long as this does not go at the expense of the independence of the judiciary,” said the Commission’s deputy head, Frans Timmermans, who is leading the case against Warsaw.

Despite the political sensitivity of the subject, at least six of the ministers left the room before the debate started on Tuesday evening as the schedule slipped for their day-long session in Luxembourg, which also included other matters.

Poland says the Commission’s critical analysis contains “factual mistakes and misleading assessments”. The PiS says the changes are needed to streamline a deeply inefficient court system and rid Poland of vestiges of communism.

As part of the broader overhaul introduced since PiS won power in late 2015, some 40 percent of Supreme Court judges will be forced into early retirement from July.

New judges on the body that validates election results will in future be appointed by the president, currently a PiS ally.

After two years in which its rift with Brussels has deepened, Warsaw has this year offered some concessions to mend fences, including reining in somewhat the newly-enhanced powers of the justice minister to name and dismiss judges at will.

But the EU says it is not enough and that upholding the rule of law -- one of the bloc’s founding principles -- is not a matter of political deals between Warsaw and the Commission.

“There can’t be any political discounts when it comes to the rule of law,” said Michael Roth, European affairs minister for Germany, which made a joint presentation with France at Tuesday’s meeting.

“We need substantial advances, especially when it comes to the independence of the Polish judiciary.”

CHALLENGING EU VALUES

Their stance is backed by countries like the Netherlands and Sweden and the ongoing review by the Commission could in theory lead to a suspension of Poland’s EU voting rights.

The prospect of an EU member flouting central EU tenets such as the separation of democratic powers or freedom of expression has emerged as a key challenge to the future of the union, already damaged by Brexit and rising eurosceptic populism.

Hungary, where nationalist Prime Minister Viktor Orban is also putting pressure on judges, media and non-governmental groups, has vowed to veto any measures against Poland.

Poland still stands to lose. The largest ex-communist EU state, it is currently the main beneficiary of EU funds.

It is already set for cuts as it has become richer since the current budget was agreed and the EU’s priorities are shifting from building basic infrastructure in the east to projects that will help southern member states deal with a migrant crisis.

Diego Garcia-Sayan, a U.N. rapporteur on judicial independence, said separately on Monday that he was “very worried about the far-reaching adverse effects that the reform of the judiciary is having -- and will have -- on the independence of Polish courts and tribunals”.

He said the concessions offered by PiS were “cosmetic”.

Together with reforms to Romania’s justice system, which are also controversial, the case highlights how fragile democracies still are in eastern Europe nearly three decades after communist rule ended.