The summit failed to close the gap between the "frugal four" and a larger group wanting more money to meet big European ambitions.
ADVERTISEMENTA two-day EU summit aimed at agreeing the bloc's long-term financing plan has ended without agreement.
It failed to close a gap between the ''Frugal Four''— that want to keep cut spending — and other net beneficiaries of the EU budget who prefer to keep the status quo.
It's all been complicated by Brexit. The UK paid more in than it took out and that has left a hole in the budget of up to €75 billion.
"Unfortunately we have observed that it is not possible to reach an agreement," said Charles Michel, president of the European Council, speaking at a post-summit press conference.
"We have observed that we need more time," he continued. "We know that this European budget is a very difficult topic and very difficult negotiation especially after Brexit and the gap it has left, between €60 and €75 billion.
"We have worked very hard in order to try to reach different concerns, different interests and different opinions around the table."
The so-called ''Frugal Four'' of Austria, Denmark, the Netherlands and Sweden, and a few others, believe the EU's 2021-2027 budget should amount to 1% of the bloc's GDP.
On the other hand, many of the poorer member states and the European Parliament wanted to stick with a bigger budget of 1.3% to fund ambitious climate change and digital economy policies.
Answering questions about the reasons behind the failure of negotiations, European Commission President Ursula Von der Leyen said: "This is democracy. We have 27 member states with different interests."
Another summit will be needed in order to reach an agreement but EU leaders did not commit to a specific schedule.
"We need informal consultations in the next days about what’s realistic," Michel told reporters.
"In the past, it was always such. We needed two or three summits. I am hopeful to get a new breakthrough next time," said Austrian Chancellor Sebastian Kurz.
"We remain very engaged, very determined," to find a compromise, Michel said.
The issue cannot be pushed forward forever, as the current budget period expires this December.
The European Parliament must also ratify any final budget agreement and for the moment, MEPs are far from happy.
"At the moment, we remain €230 billion apart," European Parliament President David Sassoli, said this week.