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Barroso hopeful of EU budget deal

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LONDON, England (CNN) -- A deal on the European Union's long-term budget is possible during crunch talks to be held next week, EU Commission president Jose Manuel Barroso said on Friday.

Barroso said he hoped a revised proposal to be revealed by Britain early next week, before a budget summit in Brussels starting on Thursday, would break the deadlock.

Speaking after meeting British Prime Minister Tony Blair in London, Barroso said the British EU presidency was "doing its best" to resolve the impasse, but "everyone must make a move."

Blair also met with his Irish, Spanish and Greek counterparts at Downing St and spoke to the leaders of Belgium and Luxembourg by phone on Friday in a bid to seal a deal to secure the bloc's funding through to 2013.

Blair's spokesman said there was a "serious wish" among all the leaders to arrive at an agreement, but noted that did not guarantee a deal would come.

Irish Prime Minister Bertie Ahern said after his meeting with Blair that it was important to reach a compromise.

"It's a difficult set of negotiations, but the overall picture is, we should try to complete this next week," he said outside Downing St.

Blair held similar one-on-one meetings with other European leaders on Thursday.

In those talks, Blair was urged to surrender more of Britain's EU rebate and allow more funding to be given to support new members.

Spending plan

The British plan currently in circulation proposes an 8 billion euros ($9.42 billion) cut in its rebate, secured by former prime minister Margaret Thatcher in 1984, in return for a review of spending -- including the Common Agricultural Policy (CAP) -- in the middle of the budget period.

Spending would be capped at 1.03 percent of the EU's gross national income, or 846.8 billion euros ($992 billion). The budget plan put forward by Luxembourg when it held the presidency in the first half of the year put a cap at 1.08 percent.

That saving would come from a 7 percent or 8 percent cut in support funding to the 10 former Communist eastern European and Baltic states which joined the bloc last year.

Portuguese Prime Minister Jose Socrates said after meeting Blair on Thursday that Britain's proposed partial cutback of its rebate should go further.

Hungarian Prime Minister Ferenc Gyurcsany, in a letter to Blair, said the plan of a cut in funding to poor regions was "unacceptable."

"I do not think that a considerably enlarged Europe and its new political aims can be financed from fewer resources," he said in the letter.

Sweden's Prime Minister Goran Persson said after his talks with Blair that he believed Britain would improve its proposal, but only at the last minute.

"The British presidency has some resources it can use in the final phase of negotiations and I am convinced they will," he said, adding that the current proposals did not go far enough.

France, a chief beneficiary of the CAP, and Germany have rejected outright the plan to review the policy.

Britain has argued throughout there can be no fundamental change in its net contribution without deep-rooted CAP reform.

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