The European Commission wants just over one trillion euros, a real terms increase of five percent from 2012 spending.
Council President Herman Van Rompuy suggests trimming that by 75 billion.
His proposed deep cuts to agriculture have angered France and Spain.
Germany and Britain want further savings, as Fabian Zuleeg, the European Policy Centre's chief economist, explains.
"Van Rompuy has tried to get close to what countries like Germany, Sweden, the Netherlands, Finland are asking for. But some countries are asking for much more cuts. So I don't think that there will be an agreement based on this proposal."
Zuleeg says Britain's threat to torpedo the summit by vetoing anything less than a real-terms freeze will play well domestically.
"The British know they have to ask for huge cuts. If they don't get these cuts there will be no way to get the compromise through parliament. Finally Great Britain from a political point of view will ‘look' better if there is no agreement," he said.
And given the strict red lines drawn up by some member states, a deal looks highly unlikely.
Source: Euronews
