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EU summit ends with no deal, budget talks postponed

(Xinhua) Updated: 2012-11-24 03:42

BRUSSELS - Negotiations on the European Union's trillion-euro budget framework for 2014-2020 have been postponed until early 2013 after a two-day special summit ended here Friday without a deal.

"Based on my proposal, there is no agreement," European Council President Herman Van Rompuy said in a press conference, referring to an 80-billion-euro ($103.2 billion) cut from the European Commission's original proposal of one-trillion-euro spending program.

The summit still showed a sufficient degree of potential convergence to make an agreement possible in the beginning of next year, the president added.

He has been mandated by EU member states to continue working towards consensus in the coming weeks, together with European Commission President Jose Manuel Barroso.

"There is an interest in compromise. The costs of no agreement will be huge, including political, economic and social costs," Barroso said in the same press conference.

The so-called multiannual financial framework is to decide the ceiling and structure of EU spending over a seven-year period, which also shapes the bloc's policy priorities, although its actual budget is decided annually in separate negotiations.

It only accounts for about one percent of the EU's gross domestic product and is mainly used for agricultural and infrastructure projects in southern and poorer regions. There has been a major clash between net contributors of the budget and net recipients at a time of three-year debt crisis.

In particular, British Prime Minister David Cameron insisted on cutting "unaffordable spending", adding that Van Rompuy's proposal was not good enough for his country and many others.

A source of both solidarity and tension, the EU budget reflects the conflict of national interests, as well as opposing arguments on how to fix the crisis and save Europe's future.

However, Van Rompuy emphasized that it would be a budget for growth, as agreed by all EU leaders, focusing on jobs, innovation and research.

If no deal can be reached by the end of next year, the 2013 budget ceiling will be rolled over into 2014 with two-percent inflation adjustment, which may bring much uncertainty for long-term projects.

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