Romanian President Traian Basescu has demanded "imperatively" a significant rise in allocations for direct payments to Romanian farmers, during his talks with European Council president Herman Van Rompuy on Thursday, European sources told HotNews.ro. The talks come as EU leaders start marathon talks in an attempt to reach a compromise on the EU's 2014-2020 budget, with Germany and others saying they would not dismiss the possibility of failure.

• UPDATE A new proposal pushed by Herman Van Rompuy is even more radical than the previous one, which called for an E80 billion cut. European sources told HotNews.ro that the head of the European Council has now proposed a EU budget cut of E200 billion - the amount demanded by Britain. The reduction would be applied to European Commission proposed budget of E1,047 billion.

The Romanian head of state - who on Wednesday said he was cautiously optimistic about the summit, but would not dismiss any result - is aiming at a rise of payment per hectare by at least 50% as compared to the current level, according to sources. This comes as EU member states with major contributions to the EU budget have been calling for cuts in subsidies.

The Basescu-Van Rompuy meeting came in preparation for the European Council talks due to start Thursday evening. The meeting was joined by European Commission President Jose Barroso.