BRUSSELS, June 16 (Xinhuanet) -- European Union (EU) leaders are to debate on a new negotiating box on the common budget on Friday,trying to reach compromise on the 25-nation block's spending in 2007-2013.

    Just hours before the summit, the Luxembourg presidency presented a proposal, in a last bid to ease the tough battle over the first budget since the EU absorbed 10 new members last year.

    Meanwhile, the EU leaders are expected to show their unity at the two-day summit beginning Thursday evening following the veto against the European Constitutional Treaty by France and the Netherlands more than two weeks ago.

    However, analysts warned that a budget deal is unlikely since there is little sign that the deadlock over Britain's rebate and the size of the budget is to be broken.

    The EU common budget, named Financial Perspective in EU jargon, will provide a legal basis for the annual EU budgets. It has evoked great controversy since the EU executive European Commission presented its draft one year ago.

    The UK rebate is on the top of contending issues. The British won its rebate, currently worth about 5 billion euros (about 6 billion US dollars) per year, in 1984 after tough negotiations by then-Prime Minister Margaret Thatcher.

    Other nations that contribute more to the EU than they get back,such as Germany, the Netherlands and Sweden, believe it is unfair for the UK to get a rebate, while they do not.

    Many of the new members, relatively poorer than older EU countries, also argue the UK should contribute more to the common coffers.

    French President Jacques Chirac and German Chancellor Gerhard Schroeder are among the toughest critics on the rebate. Chirac is demanding Britain must now make "a gesture" while Chancellor Schroeder attacked Britain for its "national egotism" on this issue.

    British Prime Minster Tony Blair, however, strongly defends thejustification of the rebate, arguing that his country receives farless than the billions of euros that France and other nations collect in agricultural subsidies.

    Except for the rebate battle, both the overall level of spending and the breakdown between the various headings are also at issues.

    The European Commission wants the EU to spend up to one trillion euros (about 1.2 trillion billion dollars) over the sevenyears, or 1.24 percent of member states' gross national income (GNI).

    It has the support of some of the less wealthy EU states, who are net recipients of EU funds.

    On the other side are the main net contributors to the EU budget - the Netherlands, Sweden, Germany, the UK, Austria and France. They want the upper limit on spending to be 1 percent of GNI.

    As for the allocation of the EU budget, no country wants to accept any reduction in the handouts it receives from Brussels. The two biggest items in the framework budget are direct subsidiesto farmers and aid to poorer regions.

    Since the 2002 agreement holds farm subsidies level until 2013,attention could focus on rural development aid. The regional aid budget looks vulnerable - but cuts here would be bitterly opposed by the poorer countries which receive most of the money.

    Spain, Portugal, Greece and the new member states from Central Europe are likely to fight calls for a reduction in aid to poorer regions, but may disagree among themselves on how it should be shared it out.

    EU officials warned that if there is no budget agreement, many of the long term structural projects would not be carried out as they would not be backed up by the overall framework of the EU funds.

    New member states would also lose out most significantly as they would receive much less EU money than what they are entitled to.

    Ahead of the summit, European Commission President Jose Manuel Barroso made an open appeal to EU leaders, urging them to show "political maturity and political responsibility" and to consider making sacrifices to reach a budget agreement.

    But it is far to be sure that the EU leaders would listen to his appeal. Enditem