EU budget talks end in failure

They said the talks would resume at another summit, probably early next year.

German Chancellor Angela Merkel and British Prime Minister David Cameron managed to agree on just one thing on Thursday night - that no agreement was likely to be forthcoming.

"I have my doubts that we will come to an agreement," German Chancellor Angela Merkel had said as she left the first day of the talks - and so it turned out.

The EU budget primarily funds programmes to help farming and spur growth in the bloc's less developed countries. In financial terms, it amounts to only about 1 per cent of the EU gross domestic product.

The bloc is divided along several lines. The most notable is between richer countries that want to reduce their contributions and poorer ones that rely on EU money.

Britain's Cameron is the most vocal leader demanding cuts, while French President Francois Hollande wants the budget to keep paying subsidies for farming and development programmes for poorer nations.

"I don't think there's been enough progress so far," Cameron said.

Meanwhile, 15 of the most vulnerable EU countries had joined forces to oppose any cuts.

These countries include not only poorer member states but also those hit hardest by the financial crisis, who argue that they need sustained and increased help.