Summit is moment of truth for budget impasse - Merkel

Thursday's summit of European Union leaders will show whether the bloc can agree a budget for the next seven years that includes the possibility of sanctions for countries that break the law, German Chancellor Angela Merkel said.

"Germany has worked hard to bridge the differences and find solutions for the concerns of Poland and Hungary while at the same time upholding the rule of law mechanism as agreed with the European Parliament," she said on arrival at a Brussels summit. "We will see today if we can find unanimity."