EU leaders meet informally in Brussels to discuss how to deal with the loss of funds from the UK when it leaves the bloc. The group of 27 is also discussing how to chose the next President of the European Commission.
When the UK leaves the European Union, a funding gap of up to €12 billion ($15 billion) per year will be left for the remaining 27 members to fill.
German Chancellor Angela Merkel said last week that Brexit was set to cause a "very challenging" shortfall in the EU budget. EU budget chief Günther Oettinger said earlier this month he wanted Berlin to pay at least €3 billion more than it does now into the EU coffers.
Ahead of Friday's meeting in Brussels, President of the European Council Donald Tusk asked the leaders if they were ready to pay more into the budget. He urged them to focus spending on defense, education and migration. Cuts to agricultural funds and payments to poorer regions have already been mooted in Brussels.
Tusk is reported to have to have written to the EU leaders that it is "unrealistic" to anticipate a budget agreement before the 2019 European elections. Last time it took the EU more than two years to reach an accord on the spending plan.
Tusk intends to issue Brexit negotiating guidelines on the future EU-UK relationship at a summit next month. This would proceed regardless of whether Prime Minister Theresa May had set out her own plan, or if a commitment on the length of a transition period had been agreed.
UK government ministers held eight hours of talks on Thursday on a Brexit position ahead of a further speech planned by May for next week. She is expected to set out a plan for "managed divergence" from the EU in a transition to a new trade arrangement with the bloc after Brexit.
A replacement for Jean-Claude Juncker
The group of 27 leaders are also due to discuss on Friday the process for choosing a successor to current President of the European Commission, Jean-Claude Juncker.
They are expected to tell the European Parliament that, as elected national leaders, they must have the final say on who is the next commission president in 2019. The Commission is the executive arm of the union and proposes new laws.
In 2014 Juncker was elected through the "Spitzenkandidat" or lead-candidate system whereby the largest party in the European Parliament nominated its candidate for the head of the commission. The EU leaders then made the final decision, taking the MEPs choice into consideration.
The parliament wants the same system for 2019 but this time with a guarantee that its candidate will be chosen.
In his letter to the EU leaders, Tusk asked if the EU should accept the parliamentary candidate automatically or if the final say should be with the leaders.
The 27 elected national leaders are expected to say that they, and not MEPs, must have the final say on who is the next commission president.
jm/ng (Reuters, AFP)