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EU: Troubling Signs, With More Budget Talks On The Way


French President Francois Hollande and German Chancellor Angela Merkel discussed the seven-year EU budget in Brussels, Belgium.
European Union leaders were resuming talks on the bloc’s seven-year budget for a second day following a brief initial round of summit talks in Brussels on November 21.

There were no reported breakthroughs in the early going.

German Chancellor Angela Merkel told reporters after the first meeting that she doubted an agreement could be reached this weekend and that further negotiations -- perhaps extending into next year -- could be required.

As the leaders gathered again on November 22, British Prime Minister David Cameron suggested the sides were still far apart on the sticking points.

"I don't think there has 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 back proposals for additional spending."

He then sent a message to countries like France, which is seeking a continuation of subsidy levels, that greater sacrifice was required.

"It isn't a time for tinkering, it isn't the time for moving money from one part of the budget to another," Cameron said. "You know, we need an unaffordable spending cut. That is what is happening at home, that is what needs to be happening here."

French President Francois Hollande said he expected that tough negotiations would be necessary to reach a deal on the EU's projected 1.091 trillion euro ($1.4 trillion) budget for 2014-20.

Amid sluggish EU economic growth and recession in some countries, Britain, Germany, and some other top contributors to the EU’s budget are seeking to limit expenditures.

France, meanwhile, has called for continued subsidies for farming and development programs for poorer EU states.

The bloc's less affluent members, such as Poland and other postcommunist states, want the 2014-20 budget maintained at current levels or even raised. Those countries benefit from the EU’s funds for infrastructure improvement, known as cohesion spending.

Cohesion spending and agriculture are the biggest items in the draft budget, accounting for 32 percent and 37.5 percent of spending, respectively.

The summit has brought to the fore the debate between countries advocating a pro-austerity strategy for helping Europe emerge from its economic doldrums and those supporting pro-spending policies.

Tensions are high since Cameron’s suggestion that Britain could veto any increase in spending. Britain wants spending frozen at 2011 levels.

Each of the 27 member states has veto power over the budget.

EU President Herman van Rompuy has proposed cutting the European Commission's planned budget by about 80 billion euros -- around 8 percent -- in a bid to secure an agreement among the competing interests.

French President Hollande said he is not satisfied with current proposals, noting they call for cuts in agricultural aid, from which France benefits. But he said a compromise would probably be necessary.

"I am in favor of a compromise," Hollande said. "It's what is in the interest of Europe and I am for what is in France's interests as well."

Britain, the Netherlands, Sweden, and Germany are among the countries that contribute more funds than they receive from the EU's budget. They argue that austerity is the best strategy to overcome Europe’s debt woes.

The European Commission, the EU’s executive arm, and its allies among the EU governments support a spending strategy, saying this will trigger cross-border initiatives that will create economic growth and jobs.

Based on reporting from RFE/RL Brussels correspondent Rikard Jozwiak, Reuters, AP, and dpa