Geen overeenkomst over budget 2007-2013 (en)

EUOBSERVER / BRUSSELS - Despite around 15 hours of negotiations, numerous proposals counter-proposals, bilaterals and tour de tables, a meeting of EU leaders broke off in ill-tempered disarray with no agreement on the bloc's future budget.

"Europe is in a state of profound crisis," said the main conductor of the talks, the Luxembourg Prime Minister Jean-Claude Juncker.

Britain, the Netherlands, Sweden, Spain and Finland rejected the final compromise package put on the table by the Luxembourg presidency.

According to Mr Juncker, the chief of the current EU presidency, the differences in the final positions were very small, but in some states there was not enough political will for an agreement.

French president Jacques Chirac was even more direct saying agreement was not reached because of the "selfishness" of three countries.

The Luxembourg leader hinted that the idea of a total restructuring of the EU budget at the final stage of the negotiations was not workable and those countries suggesting such re-arrangements - as Britain had - knew it right from the beginning.

"I'm not mocking the discussions we had but I'm sad and shamed by what I've heard," he remarked, pointing to the fact that most of the new poorest EU countries were willing to give up some of their own receipts from the budget to try and forge a deal.

"My enthusiasm for Europe has suffered a serious blow tonight," said Mr Juncker.

British prime minister Tony Blair defended his position on the country's annual rebate and denied that he had been isolated at the summit.

"We weren't alone at the table resisting this", he said.

Negotiation marathon

Failure came despite several attempts to save the agreement.

Mr Juncker expressed his pessimism about the prospects of a deal after the first round of talks, as all the countries merely repeated their positions.

But after the working lunch, the presidency announced it would prepare another list of amendments and give the debate a last try.

The proposal on the table listed several measures allowing the poorer among the old member states to keep their part from the structural funds.

Also, countries like Portugal and Spain got offers of extra sums for their less well-off regions, while Austria and Sweden got extra for their competitiveness programmes.

On top of that, the Netherlands and Sweden were offered a gross reduction in their annual GNI contribution of 210 million euros and 105 million euros respectively, plus a lower portion of VAT to be sent to the EU budget.

On the British rebate, the presidency suggested it should remain in place, but be frozen. According to commission officials, the figure on the table for the frozen rebate was an annual 5.5 billion euro per year.

Also, the EU chief suggested the whole system should be reviewed by the commission in 2010 and take into consideration "the agricultural reforms agreed in 2013".

Crisis or not?

With this failure will come the inevitable question of what weight it will lend to the perception that Europe is in crisis.

Before the meeting, various politicians had been making predictions about the dire consequences failure to agree would mean for the 25-nation bloc.

Politically, the deal was important to send a positive message about the EU's capability to bridge differences and national interests and find a compromise.

Shortly after the two negative votes on the constitution by French and Dutch citizens, Mr Juncker had insisted his European counterparts were "willing more than ever" to back down on their particular issues and make a deal on the budget.

The opponents of the Luxembourg package came to Brussels with a warning that they would not back down from their stance, and the UK, Sweden and the Netherlands played down the idea of a crisis due to the budgetary failure.

With no agreement on Friday, the budget question is set to be dropped from the agenda for the next half year under the UK presidency to be dealt with at the earliest under Austria's watch in the first half of next year.