France faced tough questioning from its European Union partners Monday after missing a deadline to explain how it intends to get its budget deficit under a euro-zone ceiling.

Finance ministers from the 12 euro nations gathered in Luxembourg for evening talks with tensions rising after the European Commission said it would rule this week that France is in breach of its EU obligations.

In what has become a common feature of the monthly euro-group meeting, French Finance Minister Francis Mer was under pressure for flouting the rules designed to ensure the credibility of the euro project.

On June 3, the rest of the EU gave France three months to come up with measures to get its deficit below the euro-zone limit of 3.0 percent of gross domestic product (GDP).

That deadline lapsed on Friday with no word from Paris. France now faces the next step in a drawn-out procedure that could ultimately lead to multi-billion-euro fines.

But France shows no sign of bending, having unveiled a tax-cutting budget for 2004 that projects its public deficit to stand next year at 3.6 percent of GDP, against a forecast 4.0 percent this year.

Mer was expected to invoke an ill-defined clause that allows for the euro zone's Stability and Growth Pact to be relaxed in the event of "special circumstances".

But smaller member states, which have battled hard to remedy their own finances, have ridiculed French assertions that the economic slowdown amounts to an exceptional circumstance.

After talks Monday with his German counterpart, Hans Eichel, Mer said he would do his best to explain his position to the rest of the euro group.

It will be up to the other finance ministers to "be convinced or reach for consequences", he said after meeting Eichel in the German city of Trier.

Eichel said: "There can't be (fiscal) consolidation without durable growth and vice versa.

"But what is lacking at this time above all is growth," he said.

The 1997 stability pact was designed to enforce budget discipline on the members of the common currency. But ironically Germany, which insisted on the deficit ceiling in the first place, has breached the pact along with France.

But while Germany, and Portugal, have embarked on tough deficit-battling measures to comply with the rules, France insists that its priority must be growth rather than belt-tightening.

Pressure is building on the European Commission, the EU's executive arm, to get tough with France.

The Commission is expected to declare that France is in breach of its obligations under the pact when it holds its weekly meeting on Wednesday.

Underlining that France has failed to take "effective" action to remedy its deficit, Commission spokesman Gerassimos Thomas said: "From our side the Wednesday decision is fairly clear."

He said that subsequently, on October 15 or 21, the Commission will decide what further action to take as part of an "excessive deficit procedure" launched against France.

The levying of fines, amounting to up to 0.5 percent of France's GDP, would be an unprecedented step. A qualified majority of the other 14 EU member states would be required, with France not allowed to vote.

The issue will come to a head when EU finance ministers, having analysed the European Commission's recommendations, next meet on November 4.

"Austria, the Netherlands and Spain will be the strongest in favour of a tough line against France," one source said ahead of the Luxembourg meeting.

Austrian Finance Minister Karl-Heinz Grasser said last week that the actions of France were "simply a provocation towards all the other euro zone countries".