Sun, 25 Nov 2012 02:15:01 GMT

Merkel hopeful of reaching agmt on EU budget early next year



From K Mammen Mathew
Berlin, Nov 24 (PTI) German Chancellor Angela Merkel has expressed optimism that an agreement on the European Union''s 1 trillion euro draft budget for 2014-2020 could be reached early next year.

In spite of the failure of the EU leaders to reach a deal on the budget at their two-day special summit, which concluded in Brussels on Friday, their discussions showed "great potential for an agreement and a good basis to continue our work", she said.

Therefore, "we are optimistic that an agreement could be possible early next year," she told a news conference after the meeting.

The summit ended in a deadlock as the EU leaders could not bridge the differences between the richer nations, which are the largest contributors of the EU funds and the poorer nations, which are the main beneficiaries, over whether to increase the budget or to reduce it.

The European Commission had in its draft budget proposed a five per cent increase to 1.09 trillion euro (USD 1.35 trillion) for the period between 2014 and 2020.

This was enthusiastically supported by the net beneficiaries, including Poland, Hungary and Spain while the net contributors to the budget rejected it and pressed for a reduction in the budget.

A revised version of the draft budget by summit host, European Council President Herman Van Rompuy, slashed 80 billion euros from the commission''s original proposal, but the net contributors to the budget pressed for deeper cuts.

British Prime Minister David Cameron demanded a reduction of 200 billion euro from the Commission''s original proposal and to keep the spending ceiling at 973 billion euro.

The EU leaders decided to break up their two-day negotiations in Brussels on Friday and to postpone a decision until early next year after they came to the conclusion that they needed more time for a thorough work on the budget, Merkel said.

They decided that there is no need to hurry for an agreement and agreed to work together to sort out the remaining issues, she said.

"We believe that we are in a position to bridge our differences and to reach an agreement," the chancellor said.

"We want an agreement which lasts for seven years," she said.

The failure of EU leaders to reach a deal on the next budget will not have any negative impact on the budget negotiations or on the 27-nation bloc, she said.

Rompuy said he is confident that an agreement on the budget can be reached early next year.

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