UPDATE 1-EU leaders to look at new budget proposal worth 1.07% of GNI

European Union leaders locked away in Brussels to discuss their next joint budget will next tackle a proposal that would cap spending at 1.069-1.07% of the bloc's gross national income, two sources told Reuters on Friday.

The 27 national leaders seemed as far away from a deal as they were before arriving for a summit in Brussels on the size of their next budget for 2021-27 and ways to spend it. They began with a baseline proposal of 1.074% and, more than 24 hours and dozens of bilateral meetings and separate negotiating huddles later, were due to reconvene at 1700 GMT.

A document circulated among member states showed that the baseline proposal would represent a spending reduction of about 10 billion euros over seven years compared to the original proposal. "If the leaders accept the direction of travel, we will prepare more detailed calculations and may reconvene tomorrow morning," an EU official said.

Another EU official added: "Either there is no common ground and we have to put a full stop to the... session, and reconvene at a later stage or tomorrow. Or we will want to call bilateral meetings (still on Thursday)."

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