Negotiators will try to navigate the myriad demands on the second day of the meeting Friday. A tense first day left many observers predicting leaders will need more time to bridge their differences over the blocís spending priorities for the years to come. ďI have my doubts that we will come to an agreement,Ē German Chancellor Angela Merkel said early Friday as she left the first day of the talks, which could stretch into Saturday.
The EU budget primarily funds programmes to help farming and spur growth in the blocís less developed countries. In financial terms, it amounts to only about 1% of the EUís gross domestic product, but the real significance of the budget is that it lays bare the balance of power between the blocís members.
The bloc is divided, notably between richer countries that want to reduce their contributions to the common budget at a time of economic malaise, and poorer ones that rely on EU money for development aid and economic investment.
British prime minister David Cameron is the most vocal leader demanding restraint, while French president Francois Hollande wants the budget to keep paying subsidies for farming and development programs for poorer nations.
But the revised proposal of European Council president Herman Van Rompuy late Thursday didnít yield further to Cameronís demands for cuts. The Council is the gathering of the 27 EU heads of state and government. Cameron said Friday it was unreasonable to increase the blocís spending for 2014-2020 when many member states are cutting their national budgets.
ď I don't think thereís been enough progress so far,Ē Cameron said. ďI mean, there really is a problem in terms of there hasnít been the progress in cutting the proposals for additional spending. It isnít a time for tinkering. It isnít a time for moving money from one part of the budget to another. You know, we need unaffordable spending cut. Thatís whatís happening at home; thatís what needs to happen here.Ē Belgian prime minister Elio Di Rupo was also displeased with Van Rompuy's proposal , but for precisely the opposite reason.
ďThe big problem, the basic problem is that there is not enough money,Ē Di Rupo said of the plan.
Standard & Poorís confirms Franceís AA+ rating, warns on deficit
Standard & Poor's confirmed Franceís long-term rating of AA+ and negative outlook on Friday but warned the government was likely to miss its public deficit target next year. Days after rival Moodyís stripped France of its Aaa rating, S&P applauded the governmentís plans to help restore the countryís competitiveness largely with tax credits to companies. However, S&P warned that the public deficit was set to miss the government's target of 3% of national output next year, estimating a budget shortfall of 3.5%. ďThe affirmation reflects our opinion that the French government remains committed to budgetary and structural reforms that would build on the measures it has proposed so far and improve the country's growth potential,Ē it said in a statement.Reuters