EU leaders look for ways to rescue budget summit

Europe's leaders struggled on Monday to rescue summit talks on the EU's trillion-euro budget, with Italy and Germany on a collision course over cuts demanded by Britain, and France warning of a breakdown in negotiations. "The negotiations are very difficult the conditions are, at this moment, not yet in place," French President Francois Hollande warned as European Union leaders prepare to meet in Brussels on Thursday and Friday.
Hollande spoke on Sunday after tricky talks with Italian Prime Minister Mario Monti in Paris, a day after German Chancellor Angela Merkel said a bid to broker a deal on the 27-state EU's spending plans for 2014-20 would be "very difficult". Monti, who is also campaigning in an Italian general election, said: "These are all very multi-layered and complex topics."
A special summit on the issue collapsed in November with leaders unable to resolve differences on a proposal by EU President Herman Van Rompuy for a reduced budget of 973 billion euros ($1.33 billion), just over one percent of EU gross domestic product. British Prime Minister David Cameron is seeking to bring the budget down to 886 billion euros.
The main thrust of the arguments, though, concerns how spending cuts should be split across different European policies such as farming support or grants to poorer regions. More than a dozen countries which are net beneficiaries of the budget, including powerful voices such as Poland, are themselves split on priorities.
Merkel and Hollande meet on Wednesday, after Merkel hosted Monti on Friday. Later on Monday, the German Chancellor also meets the Spanish Prime Minister Mariano Rajoy, whose government is currently embroiled in a corruption scandal. For Hollande, the problem is how to square a conception of EU solidarity and a need to foster growth through big-ticket, cross-border investment in such areas as energy, transportation and digital infrastructure networks, with national political priorities.
Van Rompuy, European Commission head Jose Manuel Barroso, European Parliament head Martin Schulz and Enda Kenny, the Irish Taoiseach or prime minister currently in the EU's rotating presidency chair, also meet on Monday to try and find a way through the maze. The Parliament can block any deal it considers unsatisfactory.