EU leaders strike deal on long-term austerity budget

Fri Feb 8, 2013 12:31pm EST
 
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By Charlie Dunmore and Jan Strupczewski

BRUSSELS (Reuters) - European Union leaders reached agreement on the first ever cut in their common budget on Friday after 24 hours of intense negotiations, seeking to placate millions at home struggling through government cutbacks and recession.

The expected deal met the demands of northern European countries such as Britain and the Netherlands that wanted belt-tightening, while maintaining spending on farm subsidies and infrastructure to satisfy the likes of France and Poland.

It is the first net reduction to the EU's long-term budget in the bloc's history, representing a decrease of around 3 percent on the last budget and shaving spending in areas such as infrastructure, bureaucracy and scientific research.

Last-minute haggling over precisely how to divide up the 960 billion euros ($1.3 trillion) to be spent between 2014 and 2020 dragged out the process, before Herman Van Rompuy, the president of the European Council and chairman of the summit, announced that a definitive deal had been struck among the leaders.

"Deal done!" he said in a message posted on Twitter.

At a news conference shortly afterwards, battling to stay alert after nearly 36 hours awake, Van Rompuy said the agreement was a budget of moderation that reflected straightened times.

"We simply could not ignore the extremely difficult economic realities across Europe, so it had to be a leaner budget," he said. "For the first time ever, there is a real cut compared to the last multiannual financial framework."

The deal must now be approved by the European Parliament, where leading legislators have already expressed opposition. Securing parliamentary approval is likely to take several months and is far from guaranteed.   Continued...

 
European Council President Herman Van Rompuy addresses a news conference after an European Union leaders summit in Brussels February 8, 2013. REUTERS/Francois Lenoir