States deeply divided over budget as big contributors reject plan for them to pay more

A summit of EU leaders seeking to fill a €75bn hole in the bloc’s budget left by Brexit dramatically collapsed after Angela Merkel led major contributors in rejecting a proposal that would have left them paying billions more.

The meeting in Brussels was brought to an abrupt end on Friday evening with the leaders deeply divided, leaving the European council president, Charles Michel, to admit: “We need more time.”

The UK’s departure has left EU states struggling to fund plans over the next seven years to tackle the climate emergency, aid poorer regions and continue to subsidise farmers through the common agricultural policy.

The 27 heads of state and government must agree on a budget for the next seven years, and the European parliament must give its endorsement, before the end of 2020, to avoid the EU’s spending programmes grinding to a halt. “We are super, super late,” admitted one EU official.

Michel, a former prime minister of Belgium, came under fire during the summit, which started on Thursday afternoon, for aiming “far too high” with a proposed budget of 1.074% of the bloc’s gross national income (€1.094tn).

Four member states, known as the “frugals” – the Netherlands, Denmark, Austria and Sweden – have insisted that the EU budget amounts to no more than 1% of the bloc’s gross national income.

They received the support of Merkel, the German chancellor, in opposing proposals that would slash the rebates they receive on their contributions, designed to ensure that the biggest contributors do not overpay.

Play Video EU leaders express concern over filling €75bn Brexit shortfall – video

One EU diplomat said of Michel: “He wanted enough cash to buy a Range Rover; we only have the money for a Volkswagen – and worst of all he asked Mutti [Merkel] to pay for the Range Rover.”

Responding to claims from reporters that the summit had been a failure, Michel insisted that the issue had to be debated at the “highest political level” and that he now better understood the member states’ positions. “As my grandmother used to say, ‘In order to succeed we have to at least try,’” Michel said.

A late suggestion on Friday tabled by the European commission proposed to reduce the size of the additional burden on the the biggest payers, including Germany, through significant cuts in the EU’s science and research programmes. The compromise proposal would trim €10bn off a budget put forward by Michel.

Under the new plan, the four “frugal” member states and Germany would retain their rebates. France would also see increased cash for its farmers through the common agricultural policy.

The proposal failed to secure the unanimous support of the leaders, however. “That is democracy,” the European commission president, Ursula von der Leyen, said at a press conference at the end of the summit. “It is a good tradition in democracy to debate on the different views, the different emphases … We are not there yet, but we are in a good way.”

Merkel told reporters: “The differences were simply too big.”

Diplomats from the self-styled “friends of cohesion” grouping, consisting of the net recipients of EU cash, put the failure down to a lack of solidarity among the richest member states.

The rightwing nationalist prime minister of Hungary, Viktor Orbán, who has built much of his success on attacking Brussels, told reporters: “Our ambition isn’t only to be very strong friends of the cohesion policy, but to also be very strong friends that work together for a strong EU, and for a strong EU budget for the next period.”

During the last round of budget negotiations, it took the European council two summits to reach an agreement on the EU’s long-term spending, known as the multi-financial framework. A second summit is expected in March.