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EU leaders to haggle over lower budget, setting up fight with parliament to get approval

Many European Union leaders will push for a tough austerity budget at their summit this week but the EU parliament insists it is ready to reject a deal which curtails common spending on growth and employment.

On the eve of Thursday's summit, EU President Herman Van Rompuy said that "for the first time ever - there will be a real terms cut compared to the current budget."

Britain is leading several wealthy northern member states in calling for greater austerity in the 2014-2020 EU budget, which will amount to about €1 trillion ($1.35 trillion). On the other hand, poorer eastern and southern countries in the 27-nation bloc want to ensure continued EU financial support.

Parliamentary leaders warned they would reject any plan that undermines the role of the EU.