Commission wants budget feud over by Christmas

(BRUSSELS) - The European Commission offered a compromise Friday to end a bitter feud between governments and the EU parliament over the bloc's 2011 spending and urged them to pass the budget by Christmas.

Failure to break the impasse would force the European Union to work on a fraction of its normal budget from January, putting in danger the 27-nation bloc's grand plans to raise its profile on the world stage.

Nations led by Britain have argued that the parliament's spending ambitions were unacceptable when national governments, which pay for three-quarters of the EU budget, are making deep cuts to their own public services to reduce high debts in Europe.

The commission's compromise includes a maximum 2.91 percent spending hike tolerated by governments, plus another 3.5 billion euros in contingency funds for unforeseen expenses that can be paid in subsequent years that would have to be approved in a vote by EU states.

EU budget commissioner Janusz Lewandowski said he hoped the states, parliament and commission would approve the proposal at a December 7 meeting, paving the way for Euro MPs to vote on it on December 15 "in order to give this Christmas good message to the European Union."

Representatives of EU states agreed on the contingency funding proposal at a meeting on Thursday, Lewandowski told a news conference. The compromise must be formally approved by finance ministers next week.

"We are now more optimistic about a compromise" before the beginning of next year, he said.

The British government said in a statement that it would "consider the commission's new proposals in detail.

"The UK has been clear that any increase above 2.91 percent from 2010 budget levels is unacceptable," the statement said.

Negotiations between EU states and the parliament collapsed on November 15 due to disagreements over the contingency funding and the refusal by governments to discuss the possibility of a direct EU tax on citizens.

A new breakdown would force the EU to work on just one-twelfth of its normal budget every month from January 1, just as Brussels launches a new diplomatic corps aimed at giving the bloc an influential and unified voice on the world stage.