A file picture of the European Union member states' flags in front of the building of the European Parliament in Strasbourg - Reuters
Negotiations over the European Union's 2013 budget have crumbled as member states and the EU Commission failed to come to any understanding.
Delegates from the EU Commission and the European Parliament were unsuccessful in convincing member states of the need for a 6.3 percent increase in the 2013 budget.
The eight-hour-long talks between the parties did not yield any agreement as many governments including Germany and France wanted only a 2.8 percent hike.
"Under these conditions, we felt that negotiations which hadn't really begun by six o'clock in the evening couldn't reasonably be expected to finish during the night," said the parliament's lead negotiator Alain Lamassoure.
The negotiations were over the €9 bn (£7 bn) extra funding in plugging the gap of the 2012 budget in infrastructure and education. Another round of talks is likely to take place as the 13 November deadline for the deal is fast approaching.
If the parties fail to strike a deal within the time limit, the EU Commission will have to come up with a fresh draft before the end of 2012.
"We take the view that implementation of the budget in 2012 is not a basis for the claims made by the Commission. These extra needs mentioned by the Commission should be met above all by redeployment, and we expect the Commission to react to that point," said Germany's Permanent Representative to the EU Peter Tempel during the meeting.
The collapse of the 2013 budget negotiations shatters hopes of agreement on the crucial long-term 2014-2020 budget talks which are scheduled to take place in the coming weeks.
Reports suggest that lawmakers from the European Parliament refused to cave in over the budget hike but Lamassoure said: "I would say rather that it was the ministers who didn't walk in."
The 2012 budget witnessed a 1.9 percent rise from the previous year. The EU lawmakers are demanding a budget of €138 bn for 2013, up by 6.3 percent from last year's budget of €129.1 bn.
If the deal fails to take place, the 2013 spending will be based on the 2012 budget keeping in mind inflation and will be rolled over every month.
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