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Getty Images French President Franois Hollande.

BRUSSELSThe European Union is preparing to reject Frances 2015 budget, according to European officials, setting up a clash that would be the biggest test yet of new powers for Brussels that were designed to prevent a repeat of the eurozones sovereign-debt crisis.

French Finance Minister Michel Sapin said last month that his country would run a budget deficit of 4.3% of gross domestic product next yearfar from the 3% deficit it had previously pledged. Stripping out the effects of the weak economy, the governments planned cost cuts would amount to just 0.2% of GDP, falling short of cuts worth 0.8% that it had agreed upon with Brussels.

That could put Frances budget in serious noncompliance with tightened EU deficit rules, likely leading the commission to send it back to Paris for revisions, European officials said. So far, the French government has said it wont take any extra belt-tightening measures beyond what it proposed in the spring, indicating it is ready to risk a public clash with Brussels.

People are ready to let the big boys in Brussels reject the budget, a European official said.

The conflict with France could be joined by a budget fight with Italy, which has also said that it will miss budget targets. Italy has more leeway because its past budgets have run lower deficits than Frances, but a senior EU official called a decision about whether to confront Italy borderline.

An expanded version of this report appears at WSJ.com.

Read more:
The Wall Street Journal: EU preparing to reject Frances budget for 2015