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Europe

Germany Set to Compromise on EU Budget

German Chancellor Gerhard Schröder is ready to make concessions on the EU budget. It is causing deep divisions between members, just as the political crisis flares up over the EU constitution.

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Chancellor Gerhard Schröder says Germany will do what it can

The European Union's largest member is ready to head to the negotiating table on the long-term EU budget battle.

German Chancellor Gerhard Schröder signaled that Germany is ready to make a compromise on EU financing after urgent talks with Luxembourg Prime Minister Jean-Claude Juncker on the fate of the European constitution. Luxembourg currently holds the EU presidency.

Schröder said Germany is prepared to make a contribution within the confines of its material resources, but that other countries must do likewise.

"All countries must move and national egos cannot be allowed to get in the way," Schröder told journalists in Luxembourg on Thursday.

Countries shouldn't make excessive demands

Schröder said Germany was ready to do what it could "within its means."

"Germany is ready to move, but the material means that we have, which have not gotten better, must be taken into account", he said. The same was expected from other countries.

EU-Gipfel 2005 Jean Claude Juncker und Gerhard Schröder

Chancellor Schröder and Luxembourg's Prime Minister Juncker say they want the best for Europe

"No one should make excessive demands," Schröder said.

Germany, the biggest contributor to the EU's budget, is struggling to bring its public finances within EU limits.

Wealthy countries resist budget

Luxembourg's Juncker is trying to broker a deal between member states on the 25-nation bloc's budget for the period running from 2007 to 2013. But he faces strong resistance.

Wealthier EU countries, like France and Germany, balk at paying more to help out new members. At the same time, less wealthy nations, like Spain and Portugal, don't want to sacrifice some of the aid they receive.

Juncker, who is trying to meet with as many EU leaders as possible to sound them out on their position on the budget, is aiming to get a deal inked by heads of state when they meet at the June 16-17 summit in Brussels.

But the prospect of a deal is fading fast amid the growing political crisis following the rejection by Dutch and French voters of the EU constitution. The budget talks risk being shoved aside at the summit. EU leaders are now supposed to wrangle over what to do in the wake of the rejections.

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