EU summit ends without budget deal

Hollande said Van Rompuy's proposal was reasonable. "We want a consistent budget that funds EU policies,'' Hollande said.

Further cuts, the French president said, would not be welcome.

German Chancellor Angela Merkel said the strong differences of opinion were no cause for alarm – and she wasn't taking sides in the argument between those who want more spending and those who want less.

"We should be able to bridge those differences,'' she said. "We have a reached a good basis to continue our work.''

"Our bilateral talks showed there is sufficient ground to reach agreement,'' she said.

There is no set deadline for a deal, but the closer it gets to 2014, the tougher it will be for a smooth introduction of new programs. If there is no deal up to 2014, there would be a rollover of the 2013 budget plus a 2 percent increase accounting for inflation.

ALSO READ

Pakistan stock markets zoom to record high of 20,000 pts for first time in history

Cars made in Brazil are deadly

New book teaches children ABCs of Warren Buffett

China April factory output disappoints, clouds outlook