22 Nov 2012

Europe's leaders to lock horns on budget

8:25 pm on 22 November 2012

European leaders are gathering in Brussels for what are expected to be tense discussions on the European Union's next budget.

The 27 member states are deeply divided on whether to freeze or increase the budget.

Countries that rely heavily on EU funding, including Poland and its ex-communist neighbours, want current spending levels maintained or raised.

The UK and some other net contributors say cuts have to be made.

At stake are 973bn euros (NZ$1,532.80bn).

The draft budget was drawn up by European Council President Herman Van Rompuy, who made cuts to the European Commission's original plan.

France objects to the proposed cuts in agriculture, while countries in Central and Eastern Europe oppose cuts to cohesion spending - that is, EU money that helps to improve infrastructure in poorer regions.