Budget Dispute Casts Ominous Pall Over European Union

The leaders of 25 European countries failed Friday to agree on how to spend billions of dollars in their annual budget, dealing a final, devastating blow to a troubled summit and casting the continental alliance into a murky future.

The summit deadlocked in bitter dispute over subsidies, rebates and financial aid. An afternoon of arm-twisting by senior European Union officials did little to persuade countries, in the words of German Chancellor Gerhard Schroeder, to make a sacrifice and forge a compromise.

“Europe is not in a state of crisis, it is in a state of profound crisis,” said Jean-Claude Juncker, the prime minister of Luxembourg, whose country, as rotating president of the EU, chaired the summit.
Los Angeles Times