(MENAFN - AFP) European Union president Herman Van Rompuy said Tuesday he will draft a fresh proposal on the bloc's contested trillion-euro budget in hopes of saving an extraordinary summit this week from collapse.
In an invitation to the EU's 27 leaders, Van Rompuy pledged "a revised version" of controversial proposed cuts to the EU budget for 2014-2020 to be considered when leaders begin the two-day talks Thursday evening.
Austerity-driven nations led by British Prime Minister David Cameron are demanding huge cuts to EU spending to match domestic belt-tightening, but face opposition from poorer nations to the east and south who benefit from the Brussels budget.
Run-up talks to Thursday's budget summit have exposed stark divisions between EU nations that threaten more trauma for the bloc after three years of economic crisis.
"Let there be no mistake: the absence of an agreement would be harmful for all of us," Van Rompuy said amid talk of a possible summit collapse.
Following talks between Van Rompuy and European affairs ministers to seek a compromise, Cyprus, which currently holds the rotating EU presidency, said there was progress towards a deal.
"We believe an agreement is possible," said the Cypriot European Affairs Minister Andreas Mavroyiannis. "All of us must go the extra mile."
"I am quite optimistic," he added.
But Sweden, which along with the Netherlands and Finland back Britain's demand for better spending, called for more steep cuts.
"We say that we need a modern budget for the future," Europe Minister Birgitta Ohlsson said. "We have further room for cuts."
In Strasbourg, European lawmakers were sceptical about a summit deal.
"The debate about to take place is 27 countries explaining how to contribute the least but take the most from the EU budget -- 27 selfish nations," said conservative MEP Alain Lamassoure, who heads the European parliament's budget committee.
Europe's leaders begin the talks on the next seven-year budget at 1900 GMT on Thursday, with Cameron in the role of spoiler, though he is far from the only leader to put national interest above shared concerns.
In the face of Britain's determination to secure a cut of up to 240 billion euros in the 2014-2020 budget, Van Rompuy, who will broker the talks, last week suggested a 75-billion-euro cut to the proposed 1.047 trillion euro (1.3 trillion) budget.
But that made no one happy.
On Tuesday, Italy's European Affairs Minister Enzo Moavero said Rome was ready to veto an agreement should it go against the country's interests.
"Italy is ready to use its veto if the agreement is unfair", he said. "Our impression as of today is negative and would induce us to refuse an agreement."
Italy, one of 11 net contributors to the EU budget, has been demanding the end to rebates and discounts enjoyed by Britain, Germany, Sweden and the Netherlands.
Latvia also grumbled. It is a net beneficiary of the EU budget and relies on European "cohesion funding", which aims to help poorer regions catch up economically and socially with others.
Van Rompuy is to hold bilaterals through Thursday before leaders come together for talks many tip could extend into Saturday or even Sunday.