The European Commission has warned Slovakia that it will launch immediate legal action if the government pushes ahead with a proposed law requiring NGOs that receive funding from abroad to label themselves "organisations with foreign support".

"I was in Bratislava and I was very clear," European Commission Vice President Vera Jourova said ahead of the release on Wednesday of the EU's annual rule of law report.

"If you follow the Hungarian example on the NGOs law, we will launch an infringement procedure (for violation of EU law) immediately, because already we have the decision of the court on the table."

Hungary passed a similar law on foreign-funded NGOs in 2017, but repealed it in 2021 after the European Court of Justice ruled it illegal.

The European Commission has been battling Hungary over rule of law issues and held back EU funds. Budapest also upset its EU partners at the start of its six-month rotating EU presidency with Prime Minister Viktor Orban's "peace mission" that included talks with Russian President Vladimir Putin in Moscow.

Similar legal battles with Poland ended after a change in government last year.

The EU's annual rule of law report covers the judicial system, corruption, media freedom and various checks and balances such as civil society. It offers non-binding recommendations to all 27 EU members.

Jourova said members had followed up at least partially on about two-thirds of the 2023 recommendations.

On the judiciary, even Hungary has undertaken reforms that will allow it to unfreeze up to 10 billion euros ($10.83 billion) of EU development aid.

The Commission expects more movement on media freedoms and plurality when a European Media Freedom Act takes effect in August 2025.

But Commission officials say they have seen more government pressure on civil society groups in some EU countries.

"Of course the situation is different in each member state, but that's a very worrying trend," an EU official said.