ABC Online; Luxembourg's Prime Minister, whose country holds the European Union, has said the bloc is in a "profound crisis".
Jean-Claude Juncker made the comments after a summit he chaired broke up without agreeing on a budget for 2007-2013.
"Europe is not in a crisis, it is in a profound crisis," he told a news a conference.
Mr Juncker accused some countries of lacking the political will to reach an agreement and, in an apparent attack on Britain, said those who wanted Europe to be a simple free trade zone should explain how it could work.
Britain's Prime Minister Tony Blair has insisted that his country is not isolated, saying four other countries had rejected the final compromise.
Mr Blair said the issue was not the size of Britain's budget rebate, but a fair distribution of the costs of EU spending among the richest member states, and the right balance of expenditure.
"We do not want poorer countries to start paying money to us," he told a news conference after the 10 poor, mainly east European new member states offered to give up some funds from Brussels in an unsuccessful bid to salvage a deal.
