Eurozone countries can be fined if their budget deficits exceed a certain limit

The French Finance Ministry said on Monday the budget deficit last year reached 3% of the country's economic output.

France's public debt reached 59.1% of GDP, the ministry said.

The French government blamed weak tax receipts at the end of last year for the increase, when economic growth was low.

Three percent can not lead the (European) Commission to start a procedure for excessive deficits Francis Mer, Finance Minister

The deficits of the 15 countries participating in the euro are closely monitored by the European Commission as laid out in the EU's Stability and Growth Pact.

Brussels has previously said it would fine countries who broke the 3% limit.

But on Tuesday, French finance minister Francis Mer told a news conference: "Three percent can not lead the (European) Commission to start a procedure for excessive deficits."

No action yet

Brussels said it would wait for the EU's statistics office to make an assessment on March 17 of the French budget before taking any action.

As laid out in the stability pact, countries can be fined up to 0.5% of gross domestic product, should they be in breach of the pact.

These strict rules were initially set up to make national budget policy more credible when the euro was launched.

But the global economic slowdown has hit Europe's main economies hard, with France and Germany both struggling to keep their deficits within the 3% range.

France said last week that the sluggish economic climate and uncertainty over a war with Iraq should be taken into account and the rules of the EU pact applied "with discernment".

Many experts believe important eurozone states such as France and Germany would further dampen economic growth if they cut public spending in order to push their deficits below the 3% limit.