EU leaders face a long night

German Chancellor Angela Merkel warned that success was far from certain ahead of talks aimed at reaching agreement on the European Union's (EU) 2014 to 2020 budget, but she also pledged to do her best to help get a deal done.

The pledge came after signs of disagreement emerged ahead of the meeting between those countries insistent on cuts, and those keen to preserve the status quo.

"We can not say yet if there will be an agreement," said Merkel on her way into the summit, adding: "the positions are still quite far from each other."

"Whether we will reach a common position in the end or whether we get into a situation where a majority has to agree yearly budget tranches, that I cannot say today," she added.

'Need for balance'

Merkel highlighted the importance of balancing "careful" spending and solidarity between net contributors to the EU budget and its net recipients. Her comments came soon after British Prime Minister David Cameron and French President Francois Hollande voiced their ideas on the 2014 to 2020 budget.

Cameron warned that no agreement would be reached unless there were further cuts to proposals made at an earlier budget meeting, in November.

"The EU should not be immune from the sorts of pressures that we've had to reduce spending, find efficiencies and make sure that we spend money wisely," said Cameron, ahead of the talks in Brussels.

"When we were last here in November, the numbers that were put forward were much too high. They need to come down and if they don't come down, there won't be a deal," he said.

Agriculture for the chop?

Hollande, meanwhile, said that while he was willing to negotiate, he would not concede too much ground. Agricultural subsidies, of which France is one of the biggest recipients, is one area of spending that has been suggested for cuts.

"If Europe needs - in order to find a compromise at all costs - to abandon communal politics, forget agriculture and ignore growth, I will not be in agreement," Hollande said. "We have to make savings, but without weakening the economy."

"If some are not reasonable, I will try to persuade them, but only up to a certain point."

Late on Wednesday, Hollande hosted Merkel for what was described by a German spokesperson as "a short but intense meeting."

The start of the summit was delayed by almost six hours, to allow for bilateral meetings to be held.

As the formal talks opened, EU President Herman Van Rompuy said he was "confident that around this table we can now settle on a final compromise."

Poland is expected to lead the group seeking continued financial support for the less affluent member states. Expectations are that the eventual figure, over seven years, will fall below the 1.03 trillion euros ($1.35 trillion) requested by the European Commission.

rc /pfd (AFP, AP, dpa, Reuters)