BRUSSELS Nov 23 (Reuters) - European Union leaders failed to reach agreement on a new seven-year budget for their troubled bloc, calling off talks in less than two days after most countries rejected deeper spending cuts demanded by Britain and its allies.
European Council President Herman Van Rompuy decided to end a summit on the 2014-2020 EU budget, worth about 1 trillion euros, and try again early next year rather than continue negotiating into the weekend.
Following are comments by EU leaders and officials after Friday's talks:
POLISH PRIME MINISTER DONALD TUSK
ON POSSIBILITY OF COMPROMISE:
"All participants in the summit agreed that the positions (in negotiations) have moved closer to each other and there is scope for compromise, but it will clearly require more time."
"It is better than what we had expected only 12 hours ago, but we are certainly far away from a final agreement."
"...This afternoon I saw for the first time that the negotiating positions of some countries are to reach a compromise, not to drag out endlessly the talks to block them.
"For me this was a quality change. Nobody is interested in having the talks fail, and everybody understands they will have to move a little bit.
"The fact that cohesion policy and Common Agricultural Policy are regarded as safe from further cuts is not something that we can call a victory, but it is certainly a message that is very comforting for Poland."
EU COMMISSION PRESIDENT JOSE MANUEL BARROSO
"I have to tell European governments, the European Parliament, and European citizens that I think there's a great interest in having a deal, because the cost of not having a budget would be enormous. Not only for the functioning of the EU institutions, but for the whole European economy and the predictability of investments."
GERMAN CHANCELLOR ANGELA MERKEL
ON POSSIBILITY OF A DEAL:
"I see, when I look at the complete picture of possible compromise, readiness on all sides and good possibilities to reach agreement.
"We must consider what it would mean if we were not to reach agreement. This possibility is extremely unattractive."
"We have had an exchange of views and given our president, Herman Van Rompuy, a mandate to progress on the work in order to find a consensus in the coming weeks... for 27 member states."
"There is great potential for agreement so that we believe that it is possible for an agreement to be reached at the start of next year.
"We should be able to overcome our differences - that is the view of all 27. The spirit of these talks was friendly and constructive. We want to find an agreement of the 27. Germany is committed to this goal."
SPANISH PRIME MINISTER MARIANO RAJOY
ON THE FAILURE TO REACH A DEAL:
"Spain comes out of this better than it went in. I leave reasonably satisfied. I witnessed a very constructive spirit in negotiations, which surprised me.
"But it is no surprise that we didn't reach a deal today. We were always going to need another round to accommodate the interests of 27, 28 countries. I think the gaps are closing and countries are moving closer to a common position."
ON FARM SUBSIDIES:
"I discussed this with the prime ministers of Britain and the Netherlands and they were aware that this is important for us and for France, and they were ready to listen. So this is about getting our friends on board."
ON THE MOOD IN THE NEGOTIATIONS:
"There were no harsh words exchanged, everything took place in a very constructive way."
SWEDISH PRIME MINISTER FREDRIK REINFELDT
ON SPENDING CUTS:
"We have been open to go further in reductions, of course trying to be constructive on how that can be (made) up. But now we have no deal, so we will come back to these matters."
ON NEGOTIATIONS FOR A DEAL:
"I think it was timely to stop now because we felt there was actually too much we hadn't gone through thoroughly enough and we actually agreed on a text that said we should get together, all 27, when we finalise a deal, and I think that's very important."
"I think we focused very much on expenditure this time, we were not ready to run through all the revenue side, which is very important for countries like Sweden."
FRENCH PRESIDENT FRANCOIS HOLLANDE
ON BUDGET REDUCTIONS:
"At past budget summits we tended to see an alliance between France, Germany and Britain to reduce the size of it. The fact there was a change in May (with his election as president) meant our positions were not as unanimous."
"Today the most uncompromising (countries) are talking about 30 billion euros. These are not insurmountable amounts."
ON BUDGET DEBATE:
"The EU budget has always been an ordeal."
"In the past there were always two meetings: an exploratory one to understand countries' positions and see how we could bring them closer and then a summit. We have not managed to get away from that way of doing things."
"The bilateral meetings enabled President Van Rompuy to identify the possible pathways, even if he was not able to reach an accord. So there was a coming together."
"What Herman Van Rompuy proposed yesterday (in terms of the overall budget) seems to us to be reasonable."
"The three words France wants to put into the debate are: control, solidarity and growth."
ON NEGOTIATION PROCESS:
"Progress was made. There were no threats, no ultimatums."
"(German Chancellor) Angela Merkel and I both agreed that it would be better to take some time out, because we want there to be an agreement."
ON CHANGES TO REBATES FOR NET CONTRIBUTORS:
"France will continue to push for a change to the way these rebates are calculated and keep asking for all countries to contribute to their payment."
BRITISH PRIME MINISTER DAVID CAMERON
ON COST OF EU INSTITUTIONS:
"Brussels continues to exist as if it is in a parallel universe.
"More than 200 Commission staff earn more than I do. Any EU staff not from Belgium get a 16 percent expatriation allowance on top of their generous salaries, even if they have lived in Brussels for more than three decades.
"The EU institutions have simply got to adjust to the real world."
ON POSSIBILITY OF A BUDGET DEAL:
"From a budget of nearly 1 trillion euros, it is simply not acceptable to carry on tinkering around the edges and shuffling chunks of money from one part of the budget to another. We need to cut unaffordable spending.
"And that is why we and others rejected the deal that was on the table. But we still believe that a deal is absolutely doable."
ON FREEZING EU BUDGET LEVEL:
"Freezing the budget is not an extreme position, it is eminently reasonable.
"It is possible and it would not result in my view in the hardship of any member state.
"There is no excuse whatever for not taking a much tougher approach towards the EU's administrative costs.
"The idea that EU institutions are unwilling to even consider these sorts of changes is insulting to European taxpayers."
ON HERMAN VAN ROMPUY'S BUDGET PROPOSALS:
"We can't increase spending in the EU when we are cutting at home. We rejected an attempt to commit British and European taxpayers to real terms increases.
"Frankly, the deal on the table from the president of the European Council was just not good enough. It wasn't good enough for Britain and it wasn't good enough for a number of other countries.
"Together we had a very clear message: we are not going to be tough on budgets at home and then come here and sign up to big increases in European spending."
EUROPEAN COUNCIL PRESIDENT HERMAN VAN ROMPUY
ON POSSIBLE CUTS IN EU BUDGET:
"There were some who wanted lesser cuts and some who wanted more, so I kept the line, not excluding that in further stages we will have to modify the level of expenditures. But I am proceeding in stages.
"My feeling is that we can go further... it has to be balanced and well prepared, not in the mood of improvisation, because we are touching upon jobs, we are touching upon sensitive issues."
ON POSSIBILITY OF REACHING AGREEMENT:
"The bilateral talks yesterday and the constructive discussion within the European Council show a sufficient degree of potential convergence to make an agreement possible in the beginning of next year. We should be able to bridge existing divergences."
LITHUANIAN PRESIDENT DALIA GRYBAUSKAITE
"Net paymasters are not ready to agree to this level of payments, they want to cut them even more, by at least 30 billion euros.
"The next meeting will be in the beginning of next year probably in January, February. The atmosphere was surprisingly good because the divergence in opinions was so large that there was nothing to argue about.
"It was not only Britain, all the net paymasters were not ready to agree to this level of spending and still asking for at least 30 billion of cuts. (EU Council President) Herman Van Rompuy got our authorisation to prepare a new proposal for the beginning of next year."
FOLLOWING ARE EARLIER COMMENTS BY EU LEADERS AND OFFICIALS AHEAD OF FRIDAY'S SESSION:
GERMAN CHANCELLOR ANGELA MERKEL
"We had the opportunity to study the proposals of Mr Van Rompuy last night. I believe that we won't get where we want to be in this round either, which is a unanimous decision. We will discuss this now.
"I have always said that it wouldn't be dramatic if today were only the first step, we will see in the next hours. I think the positions are still far apart and if we need a second round we will take the time to do it."
FINNISH PRIME MINISTER JYRKI KATAINEN
ON VAN ROMPUY'S REVISED PROPOSAL:
"It's very close to what he proposed a few days ago, so the differences weren't that big. He had reallocated some resources but the overall level was exactly the same (as) what was in his previous proposal. It's very difficult to say how far we can go today, everything is open."
"I do hope that we can move on, but if that is not possible we have to come back some other day. Everything seems to be open. Some opinions are very far from each other and it's very difficult to assess at the moment what will happen today."
BRITISH PRIME MINISTER DAVID CAMERON
"I don't think there has been enough progress so far.
"I mean there really is a problem in terms of there hasn't been the progress in cutting back proposals for additional spending.
"It isn't a time for tinkering, it isn't a time for moving money from one part of the budget to another.
"We need unaffordable spending cut. That is what is happening at home, that's what needs to happen here."
AUSTRIAN CHANCELLOR WERNER FAYMANN
"The first thing is that I don't see an agreement among the 27 members. One of my main concerns is that we get anything together at all that will last for seven years.
"In an economic crisis, that should be our first goal, that you get a seven-year budget together if you are holding speeches about growth every day. I think we are still some way away from reaching that goal."