Leaders agree the first ever cut to EU spending
The deal emerged after a bruising battle that saw Britain’s David Cameron leading demands for deep cuts to reflect the austerity undertaken by many governments and François Hollande, French president, rallying the defence of EU spending to help recession-hit economies.
includes a €1bn cut in spending on the Brussels bureaucracy and big reductions in cross-border infrastructure projects supposed to boost growth. But the new budget does aside €6bn for a special fund to tackle youth unemployment, which has spiralled following the financial crisis.
By Joshua Chaffin and Alex Barker in Brussels
Leaders agreed the first ever cut to the European Union budget after setting spending to the end of the decade at €960bn.
The deal emerged after a bruising battle that saw Britain’s David Cameron leading demands for deep cuts to reflect the austerity undertaken by many governments and François Hollande, French president, rallying the defence of EU spending to help recession-hit economies.
The compromise sets the figure for budget “commitments” – the maximum amount of money allotted during the seven-year period – at €959.8bn, while budget “payments” – the amount of money that can actually be spent – are more sharply reduced by €34bn to €908.4bn.Angela Merkel, the German chancellor, helped broker the deal with Mr Van Rompuy which includes a €1bn cut in spending on the Brussels bureaucracy and big reductions in cross-border infrastructure projects supposed to boost growth. But the new budget does aside €6bn for a special fund to tackle youth unemployment, which has spiralled following the financial crisis.
The seven-year budget, covering 2014-2020, is 3 per cent less than the current budget, and well below the €1,033bn first proposed by the European Commission, the EU’s executive arm, at the outset of negotiations.
However, in an ominous warning of trouble ahead, Martin Schulz, president of the European parliament, said his institution might yet reject it.
“The further we step away from the commission’s proposed figures, the more likely the proposal will be rejected,” he said, adding that MEPs were “extremely sceptical”.
The deal comes less than three months after a previous effort to agree the budget collapsed.
Mr Van Rompuy delayed presenting a compromise until the early hours of Friday morning, forcing the EU leaders into more than 15 hours of negotiations before he presented his plan to shave a further €12bn from his November proposal.
Most of the new cuts come from a fund to build cross-border infrastructure that the commission has touted for its potential to generate economic growth. The budget for agriculture – a key French priority – is being spared further cuts, although the seven-year total is more than 10 per cent down on current spending.
The latter figure is the key target for the UK government in its campaign for outright cuts. Although commitments have long been the standard measure for EU budgets, Mr Cameron has focused relentlessly on payments in an effort to present the smallest possible figure to voters back home, who are increasingly sceptical of the EU.
The final result was more than the €886bn demanded by British officials in the early stages of the talks. But the reductions should be more than sufficient for Mr Cameron to sell the deal to the UK parliament.
Additional reporting by Quentin Peel in Brussels
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