HIGHLIGHTS-EU leaders squabble over bloc's budget for 2021-27

European Union leaders start two days of tough talks on Thursday on a joint seven-year budget from 2021 and must work out how to fill a 75 billion euro ($81 billion) hole left by Britain's departure just as they face costly climate, migration and development challenges.

GERMAN CHANCELLOR ANGELA MERKEL

"Germany comes here with great determination to find a solution. We cannot say now whether we will succeed, but I hope that we make sizeable progress... It's a complicated task and certainly, big differences have to be overcome."

"Germany is not content with the current state of negotiations because we believe that among the net contributors the right balance has not been struck." "It is clear that for the convergence and agriculture in the European Union it will mean more money from the German side... but this must be shared fairly among the net contributors."

"We have a particular interest that our new (eastern) states continue to receive help... we want a modern agenda... but also the new themes like migration, external border protection, development aid are important."

LUXEMBOURG PRIME MINISTER XAVIER BETTEL

"We don't need another summit in March, we just need to conclude. I think we will be able to conclude. I hope so." "The proposal on the table is that we are going to do more with less. Fewer persons, less money."

EUROPEAN COMMISSION PRESIDENT URSULA VON DER LEYEN

"It's going to be a long and tough negotiation."

"The European Green Deal and making Europe fit for the digital age - for us, it's important that at least 25% of funds will be spent on projects under the Green Deal." "It's very important that there is a proposal for own new resources."

"As the budget is rather tight, own new resources for the EU would mitigate the pressure while paying into the ecological and digital transition." "For me, it's important to defend a modern budget with new priorities."

"The proposal we have is a good starting point."

SWEDISH PRIME MINISTER STEFAN LOFVEN

"We are fine being net payers... but we absolutely cannot accept a dramatic increase in our fees." "It is very clear that the member states are far apart from one another. The president of the European Council put forward a proposal that is far from enough."

"Now we have strong cooperation between the like-minded countries, Denmark, Austria, the Netherlands and Sweden working very close together making sure that the volume of the budget will stay at 1.0%, and also that we will have sustainable and good rebate mechanism."

AUSTRIAN CHANCELLOR SEBASTIAN KURZ

"It is in the stars whether we will have an agreement." "We will have a coordinated approach with Denmark, Sweden, and the Netherlands. We just met and will meet Charles Michel together."

LITHUANIAN PRESIDENT GITANAS NAUSEDA

"I slept well so... and am prepared for a long night spent here."

"The interest of our country is to have sufficient funding for cohesion." "We will be very consistent with the convergence of direct payments to farmers."

EUROPEAN COUNCIL PRESIDENT CHARLES MICHEL

"There are many interests, there are many concerns. They are all legitimate but I'm convinced it's possible to make progress in the next hours and the next days. Everything is on the table to be able to decide."

ESTONIAN PRESIDENT JURI RATAS

"I think these negotiations today and tomorrow, and maybe over the weekend, will be very difficult."

"We have two priorities - direct payments to support our farmers and Via Baltica."

POLISH PRIME MINISTER MATEUSZ MORAWIECKI

"The talks are also difficult because some countries are pushing for new spending goals, they want the budget to have a different structure and at the same time they want to cut spending on cohesion policy and agriculture." "From our perspective, there can be no agreement to both change the structure of the budget and to reduce its size."

"New areas of spending, like research or migration, defense or innovation are important policy areas, but they cannot be at the expense of cohesion and the common agriculture policy."

GREEK PRIME MINISTER KYRIAKOS MITSOTAKIS

"We cannot be expected to do more with less. We need a bigger envelope if we want to support at the same time traditional policies like cohesion with " "I expect a complicated discussion."

"If we want to be very ambitious, we will need more resources."

LATVIA PRIME MINISTER KRISJANIS KARINS

"We'd all be pleased if we could come to an agreement during this session." "To reach ambition, we also need to invest funds."

"Do we want these ambitious policies in Europe, or not. If we want, we need to invest. If we don't want to invest, we must revisit these ambitions." "I'm interested in us coming to a deal, I think we need that especially with Great Britain leaving, it's a clear signal we need to give to our citizens that Europe is alive and well and we can continue to function."

FINLAND PRIME MINISTER SANNA MARIN

"Member states are still quite far away from each other. We'll see if we can finish this week or we'll have to continue later on."

"There is a lot of ambition for this budget. But let's be realistic - Britain has left the EU and we are in a new position. "Finland is against rebates. Finland is against corrections."

"The proposal has gone in the wrong direction. Finland thinks the overall level is a bit too high, we would like to have it more moderate." "I am very disappointed that the rule of law mechanism... has been watered down. So we want it to be more strong."

TOP EU DIPLOMAT JOSEP BORRELL

"The proposals are never enough because some policies require a lot of resources, let me talk about my specific field - security and defense."

"If you want to be a player you have to pay a price."

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