Merkel and other European leaders say a budget deal is unlikely

German Chancellor Angela Merkel says she doubts an agreement can be reached on the European Union‘s next budget at the summit taking place in Brussels. She spoke after negotiations on the 2014-2020 budgets were adjourned until midday on Friday.

The opening of the summit was delayed for three hours because of stark differences over the budget plans. Most EU members support an increase in the budget but several countries say it is unacceptable at a time of austerity.

Earlier, President of the European Council Herman Van Rompuy circulated a revised proposal for the new budget and said he believed that a compromise was possible. “I think we’re advancing a bit, but I doubt that we will reach a deal,” Merkel said. She has previously said that another summit may be necessary early next year if no deal can be reached now.

French President Francois Hollande also cautioned that an agreement might not be possible. However, he added; “We should not consider that if we don‘t get there tomorrow or the day after, all would be lost.”

The 90-minute session late on Thursday followed a gruelling day of face-to-face meetings between Mr Van Rompuy and each of the bloc’s leaders, followed by a flurry of backroom discussions. Before suspending talks, leaders nominated Luxembourg‘s Yves Mersch to the executive board of the European Central Bank.

Failure to agree on the budget would mean rolling over the 2013 budget into 2014 on a month-by-month basis, putting some long-term projects at risk. Analysts say that could leave the UK in a worse position, because the 2013 budget is bigger than the preceding years of the 2007-2013 MFF. The UK government could then end up with an EU budget higher than what it says it will accept now.

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