France, once one of the worst violators of EU fiscal rules, was cast as a model of sound budget management as Paris' EU partners dropped disciplinary action over its public finances.

"As one of the big eurozone countries, France has to give an example," French Finance Minister Thierry Breton told journalists after his EU counterparts scrapped the sanctions at a meeting in Brussels.

"It's indispensable for France's voice to be heard," he added.

France's EU partners launched the action against Paris in 2003 after the French public deficit breached an EU limit of three percent of gross domestic product the previous year.

The European Commission, which polices members' finances, deemed France to no longer be a deficit miscreant in November after finding that the country's 2005 fiscal shortfall came in at 2.9 percent and was expected to keep falling.

After bringing the deficit below the three-percent limit in 2005, it is estimated to have fallen to 2.7 percent last year and the government is aiming to bring the public finances into balance by 2010.

"From my first day at the French finance ministry (on February 25, 2005), I devoted myself to this task," Breton said.

"I did what was necessary to put France back on track and show that it was possible," he added.

Like the other countries sharing the euro, France faced hefty fines if it broke the three-percent limit for too long and ignored its commitments to improve its finances, although none of the 13 countries has ever met that fate.

After struggling to meet the three percent rule, France and Germany spearheaded efforts to revise the treaty of which it is a provision -- the Stability and Growth Pact.

Following long and difficult negotiations, they convinced fellow EU members to agree in 2005 to water down the beleaguered pact, which some private economists and the European Central Bank considered a brutal blow to budgetary discipline.

The revised fiscal rule book gives countries more leeway to run deficits over the three percent limit during times of weak economic growth, although they are required to not lose sight of the target over the medium term.

"We have shown that the French finance ministry is from now on sure to keep its commitments," a triumphant Breton said.

EU Economic and Monetary Affairs Commissioner Joaquin Almunia hailed France's resolve to improve its finances, telling reporters that it was "very good news and a very good example for other member states that are still in the process of correcting excessive deficits."

Britain, the Czech Republic, Germany, Greece, Italy, Hungary, Malta, Poland, Portugal and Slovakia are still subject to excessive deficit procedures.

German Finance Minister Peer Steinbrueck was hopeful his country could follow in France's footsteps during its six-month presidency of the European Union, which ends in June.

"On the basis of developments in 2006 Germany will also be able to go down the path by the end of our presidency," he said.

With tax revenues stronger than expected, Germany met the three percent deficit target in 2006 with a deficit of 1.9 percent, a year ahead of the timetable imposed by other EU members.

In addition to Germany, Almunia said that he was hopeful that disciplinary action would also be dropped against Greece and Malta in the first half the year.