A yawning gap between rich and poor EU member-states was exposed yesterday by an indecisive summit meant to clear the way for agreement on the EU's budget within a month in Berlin.
Irish diplomats were among those who marked their "success" at the summit in Bonn with claims that even attempts to set global spending figures for farming and structural funds had been blocked.
The German Chancellor, Mr Gerhard Schroder, insisted a deal was still possible at Berlin. "I do not want to minimise the differences. They are in certain cases very deep but they are surmountable."
He warned however that a failure to strike a deal in Berlin could lead to "difficulties" for the EU's fledgling single currency.
The Taoiseach, Mr Ahern, was more sanguine about prospects for a deal than some of his fellow-leaders from net-recipient countries, seeing the day's "tough" discussions as an essential part of the preliminaries to a deal, a paring down of national positions to essentials.
Germany, which is backed by Britain, France, Austria, the Netherlands and Sweden, sees budget "stabilisation" as the key to winning a reduction in the £9 billion gap between what it pays into the EU and what it gets back from spending programmes. But stabilisation in real terms means multibillion pound cuts in structural funding and may make full implementation of farm reform impossible.
Mr Schroder was anxious to play down his ambitions. "We're not looking for a lottery win but the curve of contributions must start to come down," he told journalists last night.
But the Portuguese socialist Prime Minister, Mr Antonio Guttierez, attacked the German presidency's bookkeeping mentality. He said it was "inconceivable that such proposals could come from a socialist government. That is not the way we will build Europe."
The Spanish Prime Minister, Mr Jose Maria Aznar, described the German proposals as an unacceptable basis for negotiations and called for a return to the strategy set out in Agenda 2000 by the Commission. Indeed the Commission's proposals have become the rallying point for those resisting the cuts.
A more diplomatic Mr Ahern told fellow leaders that some of the more radical cuts being proposed in structural funds were "simply not acceptable . . . and completely unrealistic". Commission proposals on the transitional regime for those losing Objective 1 status and on cohesion fund eligibility for at least three years were "a minimum".
He warned that Ireland would not sign up to a global figure without clear assurances about how it would be distributed.
On regionalisation Mr Ahern told leaders that the Government regarded "agreement to this proposal as a crucial element in ensuring fair and balanced treatment", a signal that he now regards the issue as integral to the Agenda 2000 negotiations.
He strongly opposed proposals for national co-financing of farm direct-aid payments but said that Ireland was willing to look at other options for savings on the budget. But Commission proposals for spending, he said, should remain the starting point of the negotiations.
The duty-free industry was given some hope of a reprieve, with a proposal to charge travellers VAT on alcohol, tobacco and luxury goods but to exempt them from excise duty for a further 2 1/2 years. Excise duty accounts for most of tax charged in Ireland on alcohol and cigarettes.
The leaders called on the EU Commission last December to review a decision made in 1990 to end all duty-free sales within the EU from June this year. The Commission remained firmly opposed to extending the life of duty-free sales but Germany, which currently holds the EU presidency, yesterday called on Brussels to think again about the issue.
EU finance ministers are due to make a decision on the future of duty-free on March 15th and yesterday's proposal puts great pressure on the Commission to change its recommendation. The Taoiseach welcomed the German proposal and criticised the Commission's review of the duty-free ban as inadequate.
There was also some brief discussion on the problem of how to fill a package of senior forthcoming vacancies. The Italian Prime Minister, Mr Massimo d'Alema, reiterated Rome's preference for the former Italian prime minister, Mr Romana Prodi, as president of the Commission.
Spanish hints that the possible candidacy for the same job of the Secretary-General of NATO, Mr Javier Solana, could be adversely affected by intransigence on the budget were brushed aside by the presidency.