EU leaders are holding a video summit focused on an ambitious €750bn (£676bn; $840bn) EU recovery fund to deal with the coronavirus crisis.
Several northern European nations oppose part of the EU Commission plan because it means jointly raising €500bn as grants for countries worst hit by the pandemic, notably Italy and Spain.
The BBC's Gavin Lee in Brussels says this fund is unprecedented in scale.
France and Germany back the EU plan, but no deal is expected on Friday.
The Commission, which drafts EU laws, calls the plan Next Generation EU. The idea is to direct the aid especially at promising areas such as digital and green technologies, not propping up ailing old industries.
The grants would be funded by allowing the Commission to borrow on the financial markets, with national commitments to the EU budget as a guarantee.
Traditionally the EU helps member states through loans, which have to be paid back, though the terms can be generous.
A group known as the "frugal four" – Sweden, Denmark, Austria and the Netherlands – have made clear their continued opposition to grants. There are also divisions over the proposed €1.1 trillion EU budget.
German Chancellor Angela Merkel has urged the 27 member states to "act quickly and decisively", to achieve a deal before the autumn.
Diplomats say there will be no real compromise until leaders are able to meet face to face, in July.
Spain and Italy have seen the highest number of deaths in the EU during the coronavirus crisis and, in the wake of the financial crisis, are particularly keen on grants rather than loans being added to their public debt.
The Commission would borrow from financial markets to raise money for the grants, and the money would be paid back in instalments, after boosting EU income from taRead More – Source