In a meeting with Irish Prime Minister Enda Kenny in Berlin, German Chancellor Angela Merkel has pledged to find a deal in divisive EU budget talks. The UK has called for a hard line on the issue at an upcoming summit.
During Thursday's meeting, Merkel and Kenny said they were both in favor of reaching a deal on the EU's pending long-term budget, which is part of the agenda of a major EU summit later in November.
"Germany will do everything in its power to try to achieve a solution. Ireland will also do this - we spoke about it - and now we'll have to see how things develop," Merkel said.
Progress on the EU's long-term budget negotiations faced a potential hurdle on Wednesday, as members of UK Prime Minister David Cameron's Conservative party urged that he should insist on cuts in the EU budget from 2014-2020, rather than just preventing an increase.
Merkel said she would hold talks with Cameron on the issue next week.
Kenny expressed confidence that a compromise could be found.
"It's very necessary that the people of the EU and the eurozone see the decisions being made by leaders being followed through and one of these decisions to be arrived at is to have a budget so that the EU can do its work in the period 2014-2020," he said. "So I hope that that can be arrived at successfully by discussion by political leaders."
The European Commission is calling for a budget of nearly one trillion euros ($1.3 trillion) for the seven-year period starting in 2014. That's an increase of 5 percent on the previous budget from 2007-2013.
With many member nations having to make cuts to combat sovereign debt crises, some are opposed to increasing the EU budget.
No word on ESM
The fragile state of Ireland's banks was also discussed during the meeting between Merkel and Kenny.
Irelandreceived 85 billion euros to recapitalize its banks in 2010 from international lenders, including the eurozone. However, it remains unclear if Ireland will be able to receive further funds from the newly-created European Stability Mechanism (ESM), as the new role of the fund's regulator from the European Central Bank is still being developed.
Merkel said a review of the "special status" of Ireland as an ESM candidate first needed to be completed by eurozone finance ministers before a decision could be made.