The European Commission is near to deciding whether to mount a legal challenge to a decision by EU finance ministers to freeze budget discipline rules for France and Germany.
The European Union executive has asked for advice from its legal services on whether such a challenge could be mounted in the European Court of Justice after it what it saw as a severe blow to the credibility of its budget policing process.
"We are working on it, we will have a discussion tomorrow in the Commission and in a week's time we shall take a decision," Commission President Romano Prodi told a news conference after meeting the Taoiseach, Mr Bertie Ahern in Dublin Castle today.
Mr Prodi said would be above all a political rather than a legal decision.
Finance ministers decided in November to suspend the rules of the Stability and Growth Pact to spare economic heavyweights France and Germany from disciplinary action that can eventually lead to huge fines.
Both countries are set to exceed the pact's deficit limit of three percent of gross domestic product for the third straight year in 2004.