The leaders of the European Union's 27 member states are gathering in Brussels for a crucial summit on the Union's long-term budget.
Tough negotiations are expected at the summit, which starts at 3pm this afternoon (7 February). A first special summit in November failed to yield an agreement on the multi-annual financial framework for 2014-20.
Herman Van Rompuy, the president of the European Council, will this afternoon present the leaders with a new proposal that is expected to lower by up to €20 billion the overall spending ceiling of €973bn he put forward in November. The additional cuts to the proposal are thought to be in most policy areas other than farmers' subsidies and regional aid.
Germany, the Netherlands, Sweden and the United Kingdom are expected to push for even deeper cuts to Van Rompuy's proposal, notably on the EU's administrative spending, cross-border infrastructure, research and development, foreign policy and development aid.
A quarrel is expected over the rebates that five member states currently receive from the Union's budget. Britain's rebate, worth €3.6bn in 2011, appears safe since Prime Minister David Cameron has made it clear he would veto any attempt to scrap it. Austria is also fighting to keep its rebate, which was eliminated in Van Rompuy's proposal, and diplomats suggest that Van Rompuy is willing to leave it in place, albeit with deep cuts.
On Tuesday, Van Rompuy added a new element to his proposal by announcing a youth employment initiative worth several billion euros. The member states have not been briefed on the details of that scheme, and it is unclear whether or to what extent it would raise the overall spending ceiling.
Diplomats expect the summit to last well into Friday morning, and proceedings are supposed to resume later on Friday with a discussion on trade and on the Arab world.