European Union finance ministers acted illegally when they suspended the bloc's budget rules last year to spare France and Germany disciplinary action over their excessive deficits, the European Commission's legal service has concluded.
An EU source told Reuters that Economic and Monetary Affairs Commissioner Mr Pedro Solbes would recommend today that the EU executive challenge the November decision before the European Court of Justice, but a decision on legal action was not likely until next week at the earliest.
Failure to challenge the move would mean the unorthodox procedure of putting the budget rules in abeyance set a precedent, the source quoted the legal opinion as saying.
Mr Solbes' spokesman, Mr Gerassimos Thomas, declined comment on the content of the legal opinion and said the Commission recognised that legal action would not solve the EU's current economic problems.
Commission President Mr Romano Prodi said the 20-member executive would discuss the issue today but a decision on whether to take legal action was not likely until next week at the earliest.
Failure to challenge the move would mean the unorthodox procedure of putting the budget rules in abeyance set a precedent, the source quoted the legal opinion as saying.
"The legal service has said basically that the Ecofin council (of finance ministers) doesn't have the right to put the procedure into abeyance. This is the main issue that could eventually be challenged," the source told Reuters.
"The legal service says that even though this decision was made outside the rules, if we don't challenge it, it will automatically become valid," the source added.
The finance ministers overruled a Commission recommendation to move to the next stage of budget disciplinary steps against Berlin and Paris, instructing them to do more in 2004 to bring down their deficits in order to get back under the EU treaty ceiling of three percent of gross domestic product in 2005.
Instead, they accepted a political commitment from the two countries to respect the deficit limit in 2005 and asked them to take lesser measures to cut this year's shortfall, arguing that it would be wrong to jeopardise a frail economic recovery.