French Prime Minister Mr Jean-Pierre Raffarin will ask the European Commission for leniency on its public finances today knowing the 2003 budget deficit could be greater than first thought, a newspaper reported.
Quoting unnamed sources, French business daily Les Echossaid the French Finance Ministry now feared the deficit could rise to 3.9 per cent of gross domestic product this year compared to a current official forecast of 3.6 per cent.
It added that if no steps were taken the deficit would remain at around 3.7-3.8 per cent next year, well above the three percent ceiling set by the euro zone Stability and Growth Pact.
Mr Raffarin, who unveils his 2004 budget in coming weeks, is under pressure to deliver promised tax cuts at a time when the euro zone's second biggest economy is contracting.
But France, which broke the EU deficit limit of three percent of gross domestic product (GDP) in 2002, also faces an October 3rd deadline to set out measures that it will take to cut its deficit to below three percent of GDP.
Mr Raffarin is facing calls within his own conservative party to match any tax cuts with politically unpopular public spending cuts.