A decision on the next EU budget will almost certainly go down to the wire. If an agreement is to be reached, it will take place at the very end of the summit, when all possible arguments and angles have been extensively examined and exhausted.

The opening of the summit will probably see the British presidency presenting some kind of modification to their previous proposals. There is wide-ranging agreement among all the other member states that new or substantially amended proposals will need to be presented if there is to be any possibility of reaching an agreement.

We will in all probability see a shift in position not only by the British government, but also by most of the other protagonists, chief among them the Eastern European states and France.

The UK will probably offer to give up some more of its rebate, while the Eastern European member states will possibly settle for less than was originally put on offer by the Commission.

On the other hand, France could agree to a mid-term review of the CAP, although when these reforms will in actual fact come into effect will also be up for discussion. France will no doubt push for post- 2013.

Beyond all the immediate “accounts department” squabbling, there are a number of important issues at stake. Agreement on this budget is required because an enlarged EU requires adequate funding that will allow it to function effectively.

As has already been argued, an enlarged Union cannot possibly function on a smaller budget. Even the membership of Bulgaria and Romania will be thrown into doubt if not enough funding is made available. One can imagine the repercussions on the stability of these two countries if this were to happen.

What is also being played out is the future role of the UK within the European Union.

Tony Blair has gone on record as saying that he wants Britain to be at the heart of Europe. Clearly, if he tries to push through a budget that will leave the Union with little latitude for meaningful development, then it is likely that over the next decade, Britain will be on the periphery of Europe, not only geographically, but more significantly, politically as well.

The UK cannot afford to let that happen just as much as the EU cannot afford to have an alienated UK. On the other hand, Blair continues to be pushed by the Murdoch press not to “surrender” and this continues to condition an otherwise very pro-European prime minister.

And what about Malta? It seems that our so-called “financial envelope” will not be touched.

This is obviously good news for us. However, stopping at that would be shortsighted and foolish.

The concerns of the other member states, especially the ones concerning the other new member states, must be taken into consideration. We also need to have a functioning EU and therefore, a commonly acceptable agreement is needed. Failure to reach agreement will probably result in the EU grinding to a halt, which in turn will mean less Europe, less integration, less competitiveness and hence, less jobs.

My feeling is that despite the current distance that seems to separate the parties concerned, we are possibly within spitting distance of an agreement.

Clearly, a lot will depend on French President Chirac, who remains the “wild card,” although we should not underestimate the importance of the newcomer, German Chancellor Merkel, who could surprisingly be the ace in the pack.

No doubt that the next few days will be crucial. Europe needs some positive signs if it is to be able to move out of the current impasse. Above all, Europe needs leadership – maybe like never before.

A “winner takes all” result is not normally a good conclusion. However, in this case, strong leadership could provide us with an agreement where we are all winners and “a winner takes all” could be a very good result indeed.