Last minute negotiations over the EU’s budget delayed the start of the two day leaders’ summit in Brussels on Thursday.
The first talks of the year between the 27 member states come after the failure to reach a deal last November over the bloc’s finances for the next seven years.
Northern European countries including Germany and the UK have demanded similar deep cuts in Brussels to those made at the national level.
France has held out for the budget to be more or less be maintained to allow investment that will help reverse high levels of unemployment.
Expenditure, originally projected at more than a trillion euros has been trimmed several times.
An Italian official says he expects a further 20 billion euros to be agreed before the meeting gets underway. That would bring payments down to around 900-905 billion euros.
Even if the budget is approved by leaders, it still has to be voted on by the European parliament. MEPs are likely to oppose any deep cuts.
If the deal is blocked, the current budget will be rolled over into 2014 and a new agreement may not be possible before late 2014.