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Yahoo! My Yahoo! Mail More Yahoo! Services Account Options New User? Sign Up Sign In Help Yahoo! Search web search Home Singapore Asia Pacific World Business Entertainment Sports Technology Weekend Edition Top Stories Most Popular Photos Full Coverage Sitemap Acrimony as EU budget negotiations collapse AFP - Friday, November 12 Send IM Story Print Acrimony as EU budget negotiations collapse BRUSSELS (AFP) - – Tough negotiations on the European Union budget collapsed Thursday when Britain and other states refused to countenance a push by the European Parliament for Brussels to levy taxes. It was the first budget negotiation since the EU's Lisbon Treaty came into force last December, handing the parliament decision-making powers on par with governments, but member states refused to budge. Drastic cuts to national spending have emboldened states to clip the directly-elected body's new-found wings. The parliament wants states to give it more power in shaping spending priorities for budgets over the next decade, and break "taboos" over taxes. The breakdown sets up a frantic weekend for diplomats racing against the clock to find a way out of a growing impasse before legal "conciliation" officially runs out at midnight on Monday. States were ready to grant the EU a 2.91 percent increase in 2011 funding, an additional 3.5 billion euros on top of last year's 123-billion-euro (170-billion-dollar) wallet. But there was deep disagreement with the parliament over its demand to introduce immediate debate on tax ideas that could fundamentally change the way the bloc is controlled over the next decade. That and a move to add new "contingency" funding running to 3.5 billion euros, which opponents said represented a backdoor increase. The upshot is that the 27-state EU could be forced to operate off monthly budgets using 2010 figures. Britain's Justine Greening, a minister in London's Treasury, said the parliament was cutting its nose off to spite its face, suggesting that "many government departments around Europe would love to have this year's budgets rolled forward to next." She stressed that states were giving the parliament time "to reflect" but that the 2.91 percent increase remained on the table if the strings attached were removed. Parliament president Jerzy Buzek said: "We want to make clear that taxpayers' money is used for those projects and priorities which provide the biggest volume of European added-value." Diplomats said the French head of the parliament's budget committee, Alain Lamassoure, tore up the parliament's offer to drop its cash demands during the talks. A group of states led by Britain and the Netherlands, but with only "tacit" backing from EU heavyweights Germany and France, "refused all negotiation, so we drew our own conclusions," Lamassoure said afterwards. Diplomats said Britain, the Netherlands, Sweden, Denmark and Latvia -- alongside France, Germany, Austria and Finland -- had come together to put a red line in front of Belgian EU presidency efforts to broker a compromise. British Prime Minister David Cameron had obtained 13 signatures on a petition calling for a 2.91 percent limit at the EU's most recent summit in a revolt over spending increases at a time of strict national austerity. Parliament negotiator Sidonia Jedrzejewska said that "when diplomats around a table don't want to talk, how are we going to progress?" The parliament was prepared to accept 2.91 percent after previously having demanded twice that much. France's ambassador Philippe Etienne said attempts to rejig the numbers for next year provided "insufficient guarantees that there will not be runaway spending." States currently fund three quarters of the EU's income, but opening the door to direct taxes on citizens and businesses is a step too far for some states that fear treaty change would be required, representing a transfer of powers to Brussels. The percentage was "the bottom line, there is no way round that," Italy's ambassador Ferdinando Nelli Feroci had insisted. 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