Budget clash leaves EU summit close to failure

Nov 24 2012, 02:32 IST
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SummaryThe prospect of failure loomed over a European Union leaders’ summit intended to lay out the 27-country bloc’s long-term spending plans.

The prospect of failure loomed over a European Union leaders’ summit intended to lay out the 27-country bloc’s long-term spending plans. While heavyweights like Britain and France are pulling in opposite directions, smaller members, too, are threatening to veto a deal to make themselves heard.

Negotiators will try to navigate the myriad demands on the second day of the meeting Friday. A tense first day left many observers predicting leaders will need more time to bridge their differences over the bloc’s spending priorities for the years to come. “I have my doubts that we will come to an agreement,” German Chancellor Angela Merkel said early Friday as she left the first day of the talks, which could stretch into Saturday.

The EU budget primarily funds programmes to help farming and spur growth in the bloc’s less developed countries. In financial terms, it amounts to only about 1% of the EU’s gross domestic product, but the real significance of the budget is that it lays bare the balance of power between the bloc’s members.

The bloc is divided, notably between richer countries that want to reduce their contributions to the common budget at a time of economic malaise, and poorer ones that rely on EU money for development aid and economic investment.

British prime minister David Cameron is the most vocal leader demanding restraint, while French president Francois Hollande wants the budget to keep paying subsidies for farming and development programs for poorer nations.

But the revised proposal of European Council president Herman Van Rompuy late Thursday didn’t yield further to Cameron’s demands for cuts. The Council is the gathering of the 27 EU heads of state and government. Cameron said Friday it was unreasonable to increase the bloc’s spending for 2014-2020 when many member states are cutting their national budgets.

“ I don't think there’s been enough progress so far,” Cameron said. “I mean, there really is a problem in terms of there hasn’t been the progress in cutting the proposals for additional spending. It isn’t a time for tinkering. It isn’t a time for moving money from one part of the budget to another. You know, we need unaffordable spending cut. That’s what’s happening at home; that’s what needs to happen here.” Belgian prime minister Elio Di Rupo was also displeased with Van Rompuy's proposal , but for precisely the opposite reason.

“The big problem, the basic problem is that there

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