BRUSSELS, Nov 23 (Reuters) - For a few minutes on Friday
afternoon, it looked as if the European Union might just get a
deal on nearly 1 trillion euros of spending for its next
During a "tour-de-table" among the EU's 27 leaders, the
first time they had discussed the 2014-2020 budget as a group,
it seemed for a moment that France, Poland, Italy and others
might accept deeper cuts than originally proposed, diplomats
said on Friday after the summit broke up without agreement.
Britain, Denmark, the Netherlands, Sweden and crucially
Germany, the bloc's main paymaster, were all pushing for Herman
Van Rompuy, the president of the European Council, to offer
further spending cuts beyond the 80 billion euros he had already
knocked off the original budget plan.
"For about 30 minutes there was a sense around the table
that a deal could be struck, that there could be an agreement on
going further," an EU official tracking the talks told Reuters.
"But the mood quickly changed and the door slammed. It
became evident that it wasn't going to be possible."
Another official said Italy, France and other southern
states, changed their tune after hinting they might be willing
to discuss deeper adjustments to farm subsidies and drew a line,
saying no more reductions.
When the summit ended, after more than four hours of talks
on Friday which followed nearly 12 hours of negotiation on
Thursday, EU leaders were careful not to point fingers of blame.
Britain's David Cameron, seen as a 'danger man' after he
threatened to veto any deal he didn't like, was more emollient
both at the table and in public, saying it had been a group
decision to call off the talks.
German Chancellor Angela Merkel said it was no drama and the
chances of a deal in early 2013 were good, while French
President Francois Hollande said progress had been made.
Cameron was still full of firm words on EU excess, but said
no one nation was to blame for the impasse, a line others
"Frankly, the deal on the table from the president of the
European Council was just not good enough," he told reporters.
"It wasn't good enough for Britain and it wasn't good enough
for a number of other countries," he said, mentioning several
northern European states which contribute more to the EU's
budget than they get back in return.
"Together we had a very clear message: We are not going to
be tough on budgets at home and then come here and sign up to
big increases in European spending."
On the first day of the summit, Van Rompuy held one-on-one
meetings with each of the EU's 27 leaders and Croatia, which is
due to join the bloc in the middle of next year.
In his session with Cameron, the first that was held, the
British leader made a tough opening bid, saying he wanted 200
billion euros cut from the first budget proposal, bringing the
ceiling down to 890 billion euros.
But that, as with all negotiations, was an opening pitch.
During Friday's talks it appeared that Cameron might be willing
to settle for cuts closer to 105 billion euros, a similar range
to that sought by Germany, the Netherlands, Sweden and others.
That would still have required Van Rompuy, whose first
proposal lopped 80 billion off the original budget framework of
around 1 trillion euros drafted by the European Commission, to
find another 30 billion in savings.
"With 30 billion euros more in cuts, Cameron would have
agreed to a deal. But Van Rompuy didn't go for it - he wasn't
strong enough," said an EU diplomat who was in touch with
delegates in the 5th floor meeting room during the talks.
"Cameron said 'give me 30 billion more and we have an
The diplomat, from a southern European country, said the
British leader had been a positive surprise in the negotiations,
not playing as hard and immovable a role as expected.
"We were all expecting him to be the bad guy, but he played
it very well," he said, adding that Cameron and Merkel had been
tightly aligned. By contrast, Hollande seemed more lonely
without the traditional Franco-German axis backing his position.
While some officials lamented a half-chance lost, others
said there had never been a particularly strong chance of a deal
at the first summit since historically it has nearly always
taken two summits to reach a deal on the long-term budget.
Merkel and other leaders said as they arrived at the summit
on Thursday that it wouldn't be a disaster if they didn't get an
agreement right away and only returned to negotiations in 2013,
and that is now what will happen.
It is unclear when the next round of talks will be held, but
officials indicated that February was the most appropriate time.
"When I look at the complete picture of possible compromise,
I see readiness on all sides and good possibilities to reach
agreement," Merkel said of talks early next year.
"We must consider what it would mean if we were not to reach
agreement. This possibility is extremely unattractive."
What EU leaders now have is a much clearer sense of where
the deep red lines lie and which lines are more pink.
It is clear that for a deal to be struck, the final budget
will need to be around 100 billion euros below the original
Leaders reached an informal agreement to avoid further cuts
to agricultural spending, which is dear to the French, Spanish
and Italians, and funds used to help poorer EU member states and
cherished by Poland and others.
That means the axe is likely to fall on administration costs
- salaries, pensions and benefits for the EU's 50,000 civil
servants, whom Cameron sees as ripe for a dose of austerity.
New funds for scientific research and cross-border transport
and energy infrastructure - already cut in the current
compromise - are also likely to shrink further.
At the same time, it is not solely about cuts, officials
emphasised. Net contributors to the budget such as Britain will
also have to surrender some territory.
Hollande homed in on Britain's rebate -- the refund it gets
on each budget and which is largely funded by France following a
deal struck in 1984.
"France will continue to push for a change to the way these
rebates are calculated and keep asking for all countries to
contribute to their payment," he said, naming no one but
effectively targeting Britain with his words.
Britain has always maintained that the rebate, first
negotiated by former Prime Minister Margaret Thatcher, will
never be given up and Cameron has underscored that message.
But if a deal is to be struck, and especially one that
arrives at around 100-105 billion euros worth of cuts, then some
form of adjustment on the resources side may be necessary.
(Writing by Luke Baker; Editing by Paul Taylor)