EU finance ministers have rejected calls from French President Jacques Chirac to make the controversial EU Growth and Stability Pact more flexible. However, their attempt to maintain the Pact's integrity was undermined by reports that the French Finance Minister Francis Mer told colleagues that his Government was preparing to breach the budget rules for a third year running. Austrian Finance Minister Karl-Heinz Grasser said that Mer told a meeting of eurozone ministers on Monday night that France was determined to proceed with its budget plans regardless of the effect on its budget deficit. Ireland's Minister for Finance, Charlie McCreevy, declined to confirm directly the report of Mer's comments but indicated that it was accurate. McCreevy also warned that, with Europe's biggest economies in breach of the pact, its credibility was coming into question. Economic Affairs Commissioner Pedro Solbes denied that Mer had threatened to defy the Pact but he stressed that the Commission could trigger sanctions if France breached the budget rules for a third year in succession. //www.fxcentre.com