The German chancellor, Gerhard Schroeder, has said that failure to agree on a reform of European Union finances during the six-month German presidency will lead to a delay in accepting new member states.

In a magazine interview with "Der Spiegel" to be published tomorrow, Mr Schroeder, who took charge of EU affairs three days ago, demanded what he called more fairness for net contributors to the EU budget -- and he reiterated that this must include a reduction in Germany's share.

Mr Schroeder added that the overall budget should not be allowed to grow faster than the average of national budgets.

Correspondents say that, while the richer northern countries agree spending should be limited, the southern Europeans fear this will mean a loss of development revenue for them.