In a rare public disagreement with the US, British Ambassador Emyr Jones Parry said on Wednesday that the 25 EU members did not believe in linking the budget to reform issues and jeopardising UN operations.
"We are not in favour of holding any individual items or the budget hostage to other issues, but we do say very clearly that by the end of this year we need clarity and a determination to tackle a better management for the United Nations," said Jones Parry, whose country holds the current EU presidency.
Diplomats fear problems in the $3.6 billion 2006-2007 administrative budget, which is to be adopted by the end of the year and could involve New Year's Eve sessions.
Secretary-General Kofi Annan has said a delay in approving the budget would create a "serious financial crisis".
In an effort to prod states into action, Bolton on Tuesday proposed delaying the passage of the budget until key management reforms have been approved. To make his point he has organised a meeting among the organisation's largest contributors, the so-called Geneva group.
Bolton said the General Assembly could pass a temporary budget to finance UN operations through the first three or four months of 2006, a proposal UN officials say would leave them strapped for cash.
Western nations are encountering stiff resistance from developing countries that say the US wants to cut jobs and programmes in the name of efficiency.
Group of 77
A coalition of 132 developing nations, called the Group of 77, this month issued a letter criticising plans by Annan to establish an ethics office and to review General Assembly programmes and mandates that should be shut down, among other proposals.
While Jones Parry made clear the EU was allied with the US on the reform package, he disagreed with Bolton's tactics. He said the European Union had been working "very actively on the management dossier and putting forward proposals and driving it".
US officials fear the General Assembly, which controls management and budget, is ignoring findings of an investigation into the scandal-tainted UN oil-for-food programme in Iraq that recommended management changes.
The assembly's decisions on budgets are taken by consensus and allow the US, which pays 22% of the budget, to block them. Privately, EU members, who collectively pay 35% of the budget, fear the Bolton plan might backfire, with developing nations rejecting all reform plans.
In interviews and comments to reporters in the past two weeks, Bolton has warned the US might bypass the UN if it does not undergo radical changes.
"Americans are a very practical people, and they don't view the UN through theological lenses," he said. "They look at it as a competitor in the marketplace for global problem-solving, and if it's successful at solving problems they'll be inclined to use it."