EU summit postponed as leaders fail to agree on budget cuts

Malta was earmarked for an additional €200 million in new paragraphs appearing in European Council president Hermany van Rompuy's budget plan for the next seven years, a better offer than originally proposed but still not accepted by the Maltese government.

EU leader will have to continue talks at another summit in January 2013 on how to make cuts to a €1 trillion spending plan, with Van Rompuy proposing a ceiling of €972 billion over the next seven years (2014-2020).

Early today, Prime Minister Lawrence Gonzi said Malta had been offered a revised figure which was better than the two previous offers of €480 and €534 but still well below the €855 it enjoyed in the past seven years.

Gonzi said the latest figure being proposed for Malta by Van Rompuy was still "absolutely unacceptable" for the island but refused to say how close it was to Malta's as yet undeclared target.

Although hardly any country is happy with the latest Van Rompuy proposal, the main controversy appears to be between the United Kingdom, whose Prime Minister David Cameron wants deeper cuts, and France, which fights to preserve payments to its farmers at the level proposed by the Commission, which is €17 billion higher than the revised proposal.

France is also concerned that the cuts in the administration budget which Cameron is requesting would imply abandoning Strasbourg as one of the two seats of the European Parliament.

Hollande hit at the British rebate, won by then Prime Minister Margaret Thatcher in 1984, and introduced due to the fact that the Common Agricultural Policy benefits France more than Britain. The British rebate would remain under the Van Rompuy proposal.

"I cannot accept that the richest countries of the European Union come to request cheques, rebates and discounts and France, in addition, has to contribute to that. Everyone should make an effort," Hollande told journalists yesterday.