Talks in Brussels on the European Union's budget for next year have broken down.
The collapse followed the failure of negotiations between EU governments and the European parliament to agree a request for extra money to fill a funding gap for this year.
The European Commission and the European parliament wanted a 6.8% increase but most member states wanted a limit of 2.8%, arguing that it would be wrong to increase spending at a time of domestic cutbacks.
The failure of the talks will dent hopes of agreement on the 2014-2020 budget, which is up for discussion later this month, the BBC reports.
The European Union's 2012 budget was €129.1 billion, a 1.9% increase on 2011.
