Merkel forecasts 'very difficult' EU budget talks

German chancellor Angela Merkel forecast negotiations on the EU’s future budget would prove difficult and said Germany would not push for a deal at any price.

“We want a result, but of course we cannot accept a result at any price, so I expect very difficult negotiations,” Merkel said before this week’s crunch EU summit in Brussels.

Speaking before talks with her Dutch counterpart, Merkel welcomed British proposals to try to resolve the deadlock over the EU’s 2007-2013 budget, but added: “We are keen to see the next proposal” from London.

Britain holds the rotating EU presidency until January 1, when Austria takes over.

Dutch prime minister Jan Peter Balkenende pointed out that both Germany and the Netherlands were net payers into EU coffers and said his country was too heavily burdened.

“We are net payers. That is no problem,” Balkenende said. “But we have one problem, and that is that we are the biggest net payers in Europe per head and we think this has to change.”

Merkel said the “limited flexibility” of net payers and poorer nations protesting against British plans to cut development funds meant that failure was imaginable at the summit, which begins on Thursday in Brussels.

“Everyone has their pride,” she said.

With Germany struggling with high unemployment and the Netherlands closer to Tony Blair’s preference for a leaner EU, both stressed that the union must do more to foster prosperity.

Germans have a “yearning for Europe to concentrate on the important things and contribute to prosperity and jobs for people”, Merkel said.