Denmark, Austria, Sweden and the Netherlands abandoned their approval of the next EU budget, insisting that it could not exceed 1% of economic output, leaving the European Union without approaching Friday's deal after nightly talks.
Expectations of a breakthrough were low as European Union leaders met on Friday, and they spent a day and a night in talks that failed to bridge the divisions between the richest and poorest countries over the size of the upcoming budget and what they spend on them.
"I do not think we will reach an agreement," said Danish Prime Minister Mit Friedrichsen.
Her Romanian colleague, Claus Yohannes, said that another summit of European Union leaders was needed to break the deadlock.
Some European Union countries want additional funding to keep pace with the new aspirations to combat climate change and manage migration, while some want a continuous focus on development and agricultural assistance, while others are pushing for more realism in realizing the remaining fiscal deficit of 75 billion euros (81 billion dollars) The result of Britain's exit from the European Union.
A basic proposal to restrict the budget - which will continue from 2021 to 2027 - at 1.074% of the gross national income of the European Union, or 1.09 trillion euros ($ 1.18 trillion), has faced criticism from all sides.
Wealthy contributors to the union, dubbed "Frogal Four", want a 1% cap and refuse to pay more to make up for the loss of British fees. After an initial session of all 27 leaders on Thursday afternoon, they ended separate face-to-face meetings that lasted overnight and until 06:00 GMT on Friday.
EU leaders have to agree until the end of the year, so the chances of an early compromise appear low.
After the size of the budget, the other battle is what to spend on it. The poorer eastern and southern countries want to stick to development aid. France, Ireland and others support them in seeking to support key agricultural support. Germany, the Netherlands, and others want to transfer funds toward new priorities, including combating climate change, managing migration and expanding the digital economy.