EU leaders fail to agree over budget

European Union leaders wrangled over the bloc's budget for the next seven years until the early hours on Friday but made no progress, with bitter divisions between countries keen to keep the purse strings tight and those facing cuts.

The summit on how to spend and share the nearly 1 trillion euro ($1.1 trillion) budget for 2021-27 entered its second day on Friday.

The discussions have been especially problematic this year, as the departure of the United Kingdom last month has left a hole of 75 billion euros in the EU budget, said Liu Zuokui, a senior researcher on Central and Eastern European Studies at the Chinese Academy of Social Sciences.

"Britain used to be one of the biggest net contributors to the EU budget," he said. "The hole the UK left in the budget is triggering bitter divisions this year, as other net contributors are unwilling to fill in that gap while poorer ones want to preserve spending."

The summit host, EU Council President Charles Michel, worked until late when meeting with EU leaders on Thursday, hoping to help them reach consensus and present a new proposal on Friday.

He said that he is convinced it is possible to make progress within the next days.

Austria, Denmark, Sweden, and the Netherlands want to keep the bloc's finances under tight control, but a group of 15 Southern and Eastern European countries are keen to ensure that current levels of expenditure on infrastructure and agriculture are at least maintained, if not raised.

France and Germany, the two biggest budget contributors, have declined to join either side of the debate and have their own preoccupations.

French President Emmanuel Macron, who wants to boost EU spending on agriculture as well as closer defense cooperation, said he is set for the long haul if needed to get the agreement that defends the interests he represents.

He said that a deal could be reached among the 27 members with "a spirit of compromise and ambition", but it is unacceptable for Europe to compensate for the UK's departure by reducing its means.

Germany is thought to be keen for a budget to be agreed sooner rather than later, because in the second half of this year it will take over the rotating presidency of the organization from Croatia. It could be left with the difficult task of resolving the matter.

German Chancellor Angela Merkel said that the major differences among the 27 members must be conquered. "We are not satisfied with the current situation because the balance within the net payers has not yet been properly negotiated," she said.

Bitter disputes

Liu said that when the EU was closely united, the budget deals were easy to reach. But with more divisions among its members over the past few years, the disputes have become more bitter. Liu pointed to the difficult budget negotiations in 2013. Against the backdrop of these divisions, the member states must settle on how much the budget should be and how much each should pay.

Moreover, each member wants more money to support its future priorities, and the EU is facing challenges including immigration and climate change issues, he said.

"I think a budget deal will be reached finally after compromises and negotiations, possibly letting the net contributors pay less while making other member states shoulder more responsibilities," he said.

He added that economic growth and employment are likely to claim the largest shares from the budget, as usual. Just how large these shares will be needs to be weighed against other demands, including those relating to farm subsidies and the bloc's global ambitions-including countering climate change.

During the negotiations in 2013, then-British prime minister David Cameron secured the first budget cut, weeks after saying that were he to be reelected, he would offer the British public a vote on the country's membership of the EU. That decision resulted in Brexit.

Agencies contributed to this story.