BRUSSELS—The European Union’s highest court said Wednesday that the 27-nation bloc can suspend support payments to member states if they breach rule of law principles. The right-wing governments of Hungary and Poland, which had challenged the EU’s right to take such action, responded by arguing that the rule lacked a proper legal basis and would fundamentally interfere with their running of national business. Both nations, large recipients of EU funds, have come under increasing criticism over the past few years for what the EU says veers away from democratic norms When it comes to democratic principles, “the European Union must be able to defend those values, within the limits of its powers,” the European Court of Justice said in Wednesday’s ruling. “We have the legal authority that is necessary,” France’s Europe Minister Clement Beaune told the EU legislature. “The rule of law is our treasure.” The court decision was the …