The European Union President Herman Van Rompuy today said that a European Union budget deal was within reach early next year after a two-day summit collapsed without agreement.

“Constructive discussion” by EU leaders showed “a sufficient degree of potential convergence to make an agreement possible at the beginning of next year’’, Van Rompuy said, playing down the fact that the summit had ended without agreement on a budget for 2014-20.

“We should be able to bridge the existing divergences of views. A European budget is important for the cohesion of the Union and for jobs and growth in all our countries,” he said.

With the 27 heads of state and government bitterly divided over spending policy, there had been little hope of a deal on the trillion euro budget within two days.

Van Rompuy said there was “no need to dramatise” the delay. “These budget negotiations are so complex they generally take two gos,” he said.

British Prime Minister David Cameron headed a group of austerity driven nations demanding huge cuts in the next seven-year budget to match the belt-tightening measures at home.

“We must work on a moderation budget,” Van Rompuy said. .

“The times call for it. Every euro must be carefully spent.”

Divisions between have and have-not nations on how to spend the EU’s billions caused further disagreements.

Talks to settle the bitter disputes that surfaced at the two-day summit will resume in January, Belgium’s Foreign Minister Didier Reynders said on his Twitter account.

An EU diplomat said the main obstacle at the summit was Cameron’s demand for reductions in the planned budget, adding that “the most virulent” countries by his side were Sweden and The Netherlands.

Cameron had vowed to bring down the budget from a proposed €1.047 trillion ($1.347 trillion) to €886 billion euros.

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