Whilst it is not clear what the EU means by ‘European Values’ a major stated value of the Union is that itself and all member states are genuinely democratic. In practice this requirement is usually trumped by an even higher ‘value’ – full union.
The EUObserver has an update on the ‘cases’ of the EU versus Poland and Hungary . The article touches on concerns – theirs and ours – about democracy and its status in the EU.
The EU Commission has been cagey about its reaction to political and corruption issues brought to light in the two countries and has threatened that it may apply financial sanctions to one or both countries if they do not come into line with EU requirements, as agreed in the Treaties 
“The EU is expected to get the green light… from the bloc’s highest court to slash funds to member states such as Hungary or Poland that are found to have overridden the rule of law. (EU law that is.)
“Such an outcome will be a long-awaited victory for EU attempts to ensure member states abide by legal standards…”
That sets the scene but then the reporter, consistent with EUObserver’s efforts to support the EU, whatever it does, offers us the following sleight of hand:
“The EU has struggled for almost a decade to tackle democratic backsliding by some of its members.”
This raises, once again, the persistent gaps between the EU’s attempts to establish uniformity over its member states and its need to suppress democracy to achieve this . We have argued that such democracy as exits in EU member states has characteristics that are absent in the EU itself; notably, accountability to citizens and citizens’ ability to dismiss regimes whose performance they are not content with.
It is our view that, whatever we think of the performance of the governments of Poland and Hungary, those governments were elected by voters in those countries and can be dismissed by them, at least in theory, which is not possible – by statute – in the EU. For us, accountability and electability are two features of any regime that can reasonably claim to be democratic.
This democratic gap between the EU and its member states is among the fundamental reasons that the EU is doomed to fail in due course. Member states have often shown their independence – from each other as well as from the centralising goal of the EU – and this issue illustrates the point dramatically.
The EU Commission, faced with behaviour by the governments of Poland and Hungary, has made threats but in practice has not so far implemented any action. In response, the governments have declared that they will veto the common EU budget if the threatened financial sanctions are imposed.
Of course all this is based in disputes between judicial regimes and has little or nothing to do with EU citizens, who are not empowered to do anything other than dismiss their own governments. The disinclination to do this could suggest that Polish and Hungarian citizens agree with their governments, or at least will support them in any action they take against impositions from the ‘centre’, even if such impositions are consistent with the legal responsibilities enshrined within the EU’s treaties.
One interpretation of the treaties, which has been challenged by, not least, the constitutional court of Germany, has it that EU law takes precedence over the national laws of its member states .
Hungarian prime minister Viktor Orbán put the matter clearly when stated that “Member states must not accept a situation in which political decisions are taken by the European Court of Justice, instead of the peoples and governments of the member states” . He, of course, may have his own government in mind rather than his people, but his point underlines the difficulty (we say impossibility) of the EU achieving its overriding federal ambition; (the blog post is quite short and well worth a read).
Democracy is a claimed European (i.e. EU) value but European federation is the overriding ‘value’, whatever they mean by ‘value’ in general (search for ‘value’ among our previous posts). The EU doesn’t want to lose more members by being too picky; after all its own democratic credentials are questionable, especially where they might interfere with the number-one goal, which is federation. From Victor Orbán again: “For the Court, the closest possible European integration is a goal which takes precedence over all other considerations and values.” 
The status of democracy in member states is worth discussing further, though probably not here. If you would like to follow up, here are two links concerning the version of democracy practised in Hungary, notably the limited accountability to citizens practised there  and .
 Themes-15: Democracy (and selected links therein)
 Observing Democracy (particularly the Afterword)
 https://www.osce.org/odihr/elections/511429 (Executive Summary)