By Catherine Bremer
PARIS (Reuters) - France's Constitutional Council debated on Thursday whether adopting the EU's budget responsibility pact requires amending the constitution - a move that could complicate French ratification of the accord intended to bolster the euro.
Its ruling is expected late in the day.
The fiscal pact, signed in March and committing governments to tight deficit limits, must be ratified by 12 of the 17 euro zone countries before it can come into force in January, with the aim of calming investors concerned at heavy public debts.
Socialist President Francois Hollande wants to avoid writing a fiscal rule into the constitution, something left-wingers oppose, and instead hopes to pass a powerful form of law through parliament that will hold ministers to the EU budget targets.
If the Council, France's highest constitutional body, rules against him and decides the pact requires a constitutional amendment, that could delay ratification by several weeks and trigger a divisive debate on European integration.
The Council, currently made up of 12 career jurists and former politicians, was deep in debate behind closed doors on Thursday afternoon. It is expected to give its verdict around midnight, according to sources close to the body, whose hearings are generally shrouded in secrecy.
The Council comprises nine appointees, including judges but also others with political or administrative backgrounds, plus surviving former French presidents, currently three in number.
Of these, conservatives Nicolas Sarkozy, defeated in May by Hollande, and Jacques Chirac were absent. But the third, Valery Giscard d'Estaing, 86, from the centre-right, was believed to be present. An ideological foe of Hollande, Giscard has strongly promoted EU integration since he held office in the 1970s.
An official at the Council said details of which of the members were present would only be confirmed by their signatures on the eventual ruling.
Debate within the Socialist Party over how much say EU institutions should have over national affairs threatens to become a problem for Hollande as he tries to reassure Berlin that he accepts a road map to fiscal union - while avoiding forcing austerity budgets on France so early in his term.
Elected three months ago on a pledge to revive industry and halt rising unemployment, Hollande is battling to meet tough deficit targets amid a rash of job cuts and signs the economy will slip into recession in the third quarter.
ALL-DAY SITTING
The presence of politicians from opposition parties in the Constitutional Council could add fuel to any political row sparked by its decision. Jurists told Reuters earlier in the week that the verdict was too close to call.
Chirac, 79, is in frail health and Sarkozy had said he would not attend the hearing on the fiscal pact, which he helped to design together with German Chancellor Angela Merkel. Their absence removes two prominent conservatives, but most of the remaining Council members also have backgrounds on the right.
The fiscal pact, which 25 EU states signed up to in March, obliges governments to write into national law a commitment to restrict structural deficits to within 0.5 percent of gross domestic product under normal circumstances.
Were the Council to decide a powerfully binding form of law - known as an organic law - would suffice in France, as Hollande wants, such legislation would probably be put to a normal parliamentary vote in the last week of September and the Socialists' majority should mean it would pass fairly smoothly.
If, however, the Council decides a constitutional amendment is needed, then the two houses of parliament, the National Assembly and Senate, would require a special, joint session at the historic palace of Versailles, outside Paris. That would most likely take place in October or even November.
Backing from centrist and conservative lawmakers should ensure the required three-fifths majority for constitutional change, but the process could push back final ratification of the fiscal pact until December, leaving a shadow of uncertainty hanging over jittery financial markets.
The only other way around a vote of the joint chambers of parliament would be to call a referendum on the issue, something Hollande wants to avoid after his part in a failed campaign in 2005, when French voters rejected an EU constitution.
Several countries, including Italy and Germany, have already ratified the pact, but Germany's constitutional court is examining complaints over whether it complies with national laws and will make its ruling on September 12.
France's Constitutional Council has ordered constitutional amendments several times in the last few years, notably for the adoption of the European Union's 1992 Maastricht Treaty, its 1997 Treaty of Amsterdam and the Lisbon Treaty in 2007.
(Additional reporting by Emile Picy and Daniel Flynn; Writing by Catherine Bremer; Editing by Alastair Macdonald)
