From Berlin, Brussels and other European capitals, the message going to the French government this week could scarcely have been louder or clearer.

Alarmed that President Jacques Chirac's budget proposals risk tearing apart the eurozone's rules for fiscal discipline, some of Europe's most influential policymakers are asking France to think again. "The French government cannot expect us to lift a finger to help soften the stability and growth pact," says Hans Eichel, Germany's finance minister, referring to the agreement that obliges eurozone governments to balance their budgets over the medium term. "It really is a matter of credibility," observes Jean-Claude Juncker, Luxembourg's prime minister.

At issue are the arrangements under which the eurozone's 12 national governments commit themselves to fiscal discipline, the European Commission monitors their compliance and the European Central Bank, if satisfied, may reciprocate with low interest rates. Such are the risks of upsetting this delicate tri-partite mechanism, purpose-built for European monetary union, that all have an interest in avoiding not only its collapse but also public disputes over its operation.

It is a measure of how far Mr Chirac's plans have thrown the rest of Europe into a spin that France's partners have felt obliged to speak out. Pedro Solbes, European commissioner for monetary affairs, stated flatly on Tuesday that he opposed extending the 2004 deadline for France to balance its budget. "If it is extended again, France will never reach its target," he said.

Such statements are more than ritual warnings. EU leaders are worried that, if governments break their fiscal promises, the faith of financial markets and the public in the way the eurozone manages its economy and the euro could go out of the window.

Some Brussels officials fear that France may try to co-opt other countries - notably, Germany and Italy - into pressing for an extension of the 2004 deadline. That would infuriate not only the Commission but also smaller EU countries that have played by the rules. "It would be a real problem," says a diplomat from Denmark, which assumes the EU's presidency next month.

Yet policymakers accept that the budget problems in France - like those in Germany, Italy and Portugal, which are equally in the spotlight - come at a sensitive time. An unfortunate coincidence of Europe's electoral calendar and the world economic cycle has meant that the stability pact has been under strain for the past year from a combination of weak economic growth and the exigencies of electoral politics.

By next September, when Germany elects a new parliament, all four countries will have experienced hard-fought electoral campaigns in the space of 16 months. Although all eurozone countries have suffered from economic slowdown, it is these four that have the highest budget deficits and are finding it hardest to meet their commitments to balance their books by 2004 at the latest.

The crunch may come with next month's French parliamentary polls if Mr Chirac's interim centre-right government is victorious and sticks to its platform of tax cuts and higher spending on law and order. Although a French government spokesman promised yesterday that Paris would abide by the stability pact, he also said the tax cuts would go ahead.

This appears difficult to reconcile with Mr Chirac's reaffirmation at an EU summit in Barcelona in March that France would bring its budget close to or in balance by 2004. "I don't understand how Mr Chirac can vote in favour [of the 2004 deadline] in Barcelona and say a few weeks later that this no longer applies," Mr Eichel said.

Many inside the Commission fear that Mr Chirac, fresh from his victory in the presidential election, is in the mood for a fight. "On a whole range of issues, from the budget to farm subsidies and EU enlargement, Chirac could be a problem," says one senior official.

At the same time, European policymakers draw comfort from recent lessons involving Italy, Portugal and Germany. Soon after Italy's elections in May 2001, Giulio Tremonti, the new finance minister, announced on prime-time television that the former centre-left government had left Italy's public finances in worse shape than expected. It was a way of preparing the public for the news that the conservative government led by Silvio Berlusconi, prime minister, would have to postpone the tax cuts that had formed a central plank of his election platform.

Much the same happened last March in Portugal, where the newly elected centre-right government held its socialist predecessor responsible for a soaring budget deficit. "Our economy is like a drowning man," said Manuela Ferreira Leite, finance minister. The new government's austerity programme involves raising value added tax, closing or merging dozens of state institutes and setting debt limits for municipalities.

Like Portugal, Germany narrowly avoided receiving a formal EU reprimand early this year for its high deficit. Mr Eichel's response was to draw up a joint plan for controlling expenditure between the federal government and Germany's 16 states.

In all three cases, the lesson is that the eurozone's methods of co-ordinating policy and applying peer pressure among governments, the Commission and ECB can bring results.

As in Italy and Portugal, the French government, if re-elected, intends to conduct an audit of the national accounts. It would come as no surprise if this formed a prelude to a solemn declaration that France's budget difficulties were the fault of the former leftwing government of Lionel Jospin. "This is likely to be used as a tool for renegotiating with the Commission the 2004 deadline for budgetary balance," says Luigi Buttiglione, economist at Barclays Capital.

For all their public rhetoric, the Commission and ECB know that some such compromise may prove necessary if economic growth is less robust over the next two years than they hope for. Even Mr Eichel says a balanced German budget by 2004 will require growth of 2.5 per cent in both 2003 and 2004 - a tall order for an economy with average annual growth of 1.5 per cent since unification in 1990.

Officials close to Mr Solbes say France, Germany, Italy and Portugal would be deemed to have budgets "close to balance" if their deficits were about 0.5 per cent of gross domestic product.

In its April monthly report, the ECB noted that some countries might not balance their budgets if "the assumptions about economic developments have not materialised and growth turns out to be significantly weaker . . . than expected".

For both the Commission and the ECB, the essential point is that governments must adhere to the principle of medium-term budget balance in good faith. This means disapproval of governments that raise spending or cut taxes in a way that consciously delays budget balance.

But it also means understanding for governments that may miss their target date for nominal budget balance but which have done better in terms of their cyclically adjusted budgetary position as well as low public debt. France scores well on both these points - better than Germany on its cyclical deficit and better than Italy on public debt. These will doubtless be useful cards for the next French government to play, should it seek to renegotiate the deadline for balancing its budget.

Matters may come to a head towards the end of the year when eurozone governments present their updated annual "stability programmes" for the Commission's inspection. A full-scale confrontation involving France would carry the risk of changing for ever the spirit, and possibly the rules, that frame the eurozone economy. Precisely for this reason, however, the pressure on policymakers to act with a sense of collective responsibility for the euro will be stronger than ever.

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