The European Union failed on Friday to agree long-sought common rules for taxation of income from billions of euros in its citizens' savings held abroad.
The deal this time stumbled over the issue of Italian milk.
Cash strapped EU states like Germany want to adopt rules that would allow it to recoup untaxed income from savings that citizens have squirreled away beyond its fiscal borders.
But Italy said it would only back the deal - which has defied years of negotiations - if it got a partial write-off on around €650 million of fines the EU slapped on Italian farmers for overproducing milk.
In return, other 14 members insisted dairy products should not be mixed with fiscal issues and French President Jacques Chirac complained that, on a day Iraq was being bombed, it was inappropriate to be talking about milk, EU officials said.