EU Spars Over Budget as Chiefs See Possible Deadlock

Posted by Forexsq 1098 days ago (
img Divisions between rich and poor countries flared over the European Union’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.

‚ÄúPositions remain too far apart,‚ÄĚ Merkel told reporters early today after the first session of a summit in Brussels. ‚ÄúProbably 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.‚ÄĚ

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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