Divisions between rich and poor countries flared over the European Unionâ€™s next seven-year budget, leading German Chancellor Angela Merkel to rule out an accord until the new year.
France defended farm subsidies, Britain clung to a rebate and Denmark demanded its own refund, while countries in eastern and southern Europe said reduced financing for public-works projects would condemn their economies to lag behind the wealthier north.
â€śPositions remain too far apart,â€ť Merkel told reporters early today after the first session of a summit in Brussels. â€śProbably there will be no result at the end of this summit. There may be some progress but it is probable that we will need to meet again at a second stage.â€ť
The political stakes dwarf the economic significance of spending equal to 1 percent of European gross domestic product, offering a glimpse of where the power lies in the 27-nation European Union and whether the euro-area crisis is bringing the bloc closer together or driving it apart. In the absence of a deal by late 2013, the EU would roll over its annual budget.
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