The European Commission has begun disciplinary action against France and Germany for failing to comply with euro zone stability pact guidelines on their public sector deficits.
The EU executive began an "excessive deficit procedure" against Germany; France received an "early warning" alert.
The budgetary rules surrounding the euro have come under attack in recent weeks as Germany, France and Italy show signs of breaching the ceiling on budget deficits of 3 per cent of GDP.
The EU has already postponed the deadline for balancing budgets from 2004 to 2006, but France has indicated it will not feel bound even by the new deadline.
Berlin has faced a budgetary crisis for months, but matters came to a head after a huge shortfall in September tax revenue that left the country facing a €14 billion hole in its finances next year.