“EU governments believe the (European) parliament (is indulging in) wishful thinking,” over financing of common projects, a spokesman for the current EU President Austria has said. This came as talks intensified on clinching a compromise this week on the bloc’s 2007-2013 budget.

The MEPs are demanding 12 billion euros more than EU leaders agreed after tough negotiations came to a close in December. Austria has signalled it is ready to add less than another two billion euros. Parliament seeks more funds for trans-European motorways and railways, research and educational projects. To try to sweeten the deal, Austria has offered more flexibility in reallocating unspent funds.

A setback would mess up the bloc’s financial planning. If the long-term framework is not approved, the EU would have to operate on the basis of annual budgets. The experts say this would lead to disputes every year – and much less aid for the 10 member states which joined in 2004. Negotiators will meet this Tuesday, hoping to announce an agreement on Wednesday.

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