News / Europe

EU Leaders Brace for Bitter Budget Battle

Two people are seen underneath a giant banner for the euro currency outside an EU summit in Brussels, Nov. 22, 2012.Two people are seen underneath a giant banner for the euro currency outside an EU summit in Brussels, Nov. 22, 2012.
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Two people are seen underneath a giant banner for the euro currency outside an EU summit in Brussels, Nov. 22, 2012.
Two people are seen underneath a giant banner for the euro currency outside an EU summit in Brussels, Nov. 22, 2012.
VOA News
European Union leaders prepared Thursday for a summit on a proposed budget that has divided the 27-nation bloc already facing economic crisis. The two-day summit officially opens Thursday evening in Brussels.

In a battle pitting wealthy member states against those seeking a bigger aid budget, British Prime Minister David Cameron has threatened to use his veto unless spending levels are frozen. The current 2007-2013 budget is $1.28 trillion and the next one would cover spending through 2020.

The seven-year budget funds programs to spur farming and growth in the bloc's less developed regions and amounts to about 1 percent of the EU's gross domestic product.

Cameron, under constant pressure from skeptics in his Tory party, is the main proponent of imposing limits on EU spending. He is joined by the Netherlands, Sweden and, to a lesser extent, Germany.

The European Commission, the EU's executive arm, backs more spending, arguing that cross-border initiatives will help create economic growth and jobs.

Sixteen of the EU's most financially and economically vulnerable countries have joined forces to oppose cuts to funds earmarked for economic growth and development. The countries include not only traditionally poorer member states, many in Eastern Europe, but also those hardest hit by the financial crisis, like Greece, Portugal and Spain.

On Wednesday, Greece's international lenders failed for the second straight week to reach an agreement on releasing more bailout money to the debt-ridden Athens government.

Eurozone finance chiefs, the International Monetary Fund and the European Central Bank ended a lengthy meeting in Brussels without agreeing on terms for sending a $40 billion rescue package to Greece. Athens says it needs the money - a segment of its second bailout in two years - to avoid defaulting on its financial obligations.

Some information for this report was provided by AP and AFP.

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