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European union leaders fail to agree on new 7 year budget

European union leaders fail to agree on new 7 year budget
An EU summit has ended with no definitive answer on the bloc’s long-term budget, officials have said. (alliance/AP Photo/O. Matthys)

European Union leaders failed to agree on its new 7-year budget on Friday. As a result, a new summit will have to occur in the coming weeks.

The 27 leaders of all member states had spent two days in a standoff over the 2021-27 allowance, with a significant gap between countries that are net recipients of funds and the wealthier member states who are keen to rein in spending.

German Chancellor Angela Merkel said the difference between the member states was too big to compromise on while the EU Council President Charles Michel said: “We need more time.”

The new budget has a Brexit-sized hole to fill and some member states were unwilling to pay more for the bloc’s next spending proposals, worth around €1 trillion ($1.1 trillion).

Council President Michel added: “Unfortunately today, we have observed it was not not possible to reach an agreement.”

It was not clear exactly when a new round of talks would take place.

The so-called “Frugal Four” of Austria, Denmark, the Netherlands and Sweden, as well as a few other nations, believe the EU’s 2021-2027 budget, which is intended to finance ambitious climate change and digital economy policies, should amount to 1% of the bloc’s gross national income.