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EU leaders set for crucial budget summit

7 February 2013 Last updated at 22:35 GMT

European Union leaders are meeting for a two-day summit in Brussels to try to strike a deal on the next seven years of EU spending.

High EU expenditure at a time of cutbacks and austerity is the main issue dividing the 27 member states, having failed to reach a compromise at a similar summit last November.

Gavin Hewitt reports from Brussels.