News / Europe

EU Leaders: 'Deal Done' on Long-Term Austerity Budget

A man follows the media conference of European Council President Van Rompuy at the European Council building, Brussels, Feb. 8, 2013.
A man follows the media conference of European Council President Van Rompuy at the European Council building, Brussels, Feb. 8, 2013.
Reuters
European Union leaders reached agreement on the first ever cut in their common budget on Friday after 24 hours of talks, 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 will be 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 from infrastructure to administration 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 drew 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, saying that the agreement had secured a budget until the end of the decade. "Worth waiting for," the message added.
 
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.
 
After negotiating through the night, leaders broke up for a rest, allowing German Chancellor Angela Merkel to swap her green jacket for a lilac one, and returned to address a list of questions, including whether to reduce the burden on the Netherlands and how to satisfy smaller countries such as Romania and Bulgaria.
 
Mindful of their restive voters, Northern European states were adamant that as they shrink spending at home and grapple with the aftermath of the global financial crisis, the European Union had to do the same.
 
Around 12 billion euros was cut from the last budget proposal, made at a summit in November.
 
While vast as a headline figure, in annual terms the budget amounts to just 1 percent of total EU economic output.
 
The cuts agreed on Friday fell mainly on spending for cross-border transport, energy and telecoms projects, which were reduced by more than 11-billion euros. Pay and perks for EU officials - a top target for Britain - were lowered by around 1-billion euros, officials said.
 
Spending on agriculture was spared further cuts, and there was an increase of about 1.5-billion euros on rural development over the seven years, satisfying France, Italy and Spain.
 
Narrow gap
 
Even with a deal, around 40 percent of the spending will still be dedicated to farming, something that frustrates many northern European states, which want a more dynamic budget.
 
At the same time, officials said money had been set aside for growth-stimulating measures, for research and for structural funds to flow to countries worst hit in the economic crisis, including Greece, Ireland, Portugal and Spain.
 
There were also stipulations for green investment and 6-billion euros for a fund to combat youth unemployment via apprenticeships in hard-hit countries.
 
The deal still faces further hurdles, not least at the bloc's parliament.
 
"The European Parliament will not accept this deficit budget if it is adopted in this way," the parliament's president Martin Schulz said. "That is certain."
 
In recent weeks, Van Rompuy has been in touch with every EU leader to assess where the contours of an agreement may lie.
 
But reaching a deal was never going to be a simple question of cutting the total, since the budget also involves delicate negotiations over rebates - amounts countries get reimbursed after they have made contributions.
 
Denmark won a rebate of around 130-million euros a year, but other rebates were trimmed or modified. The Czech Republic was among a small group of countries that fought for final extra distributions, mostly for funds to build infrastructure.
 
The EU calculates two budget numbers: a headline "commitments" figure that sets a ceiling on how much can be paid out, and a lower "payments" figure that indicates what will actually be spent.
 
The baseline payments figure in the framework agreed on Friday was expected to be 908-billion euros, a figure low enough to convince Britain, which focuses on payments rather than commitments, that it was getting a satisfactory deal.

You May Like

Sydney Hostage-taker Failed to Manipulate Social Media

Gunman forced captives to use personal Facebook, YouTube accounts to issue his demands; online community helped flag messages, urged others not to share them More

UN Seeks $8.4 Billion to Help War-Hit Syrians

Effort aimed at helping Syrians displaced within their own country and those who've fled to neighboring ones More

Who Are the Pakistani Taliban?

It's an umbrella group of militant organizations whose objective is enforcement of Sharia in Pakistan 'whether through peace or war' More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Putin: Russian Economy to Rebound in 2 Yearsi
X
December 18, 2014 5:13 PM
Russian President Vladimir Putin held his annual end-of-the-year news conference Thursday, tackling questions on the Russian economy, the crisis in Ukraine and Russian relations with the west. VOA's Jeff Custer reports.
Video

Video Putin: Russian Economy to Rebound in 2 Years

Russian President Vladimir Putin held his annual end-of-the-year news conference Thursday, tackling questions on the Russian economy, the crisis in Ukraine and Russian relations with the west. VOA's Jeff Custer reports.
Video

Video Nigerians Fleeing Boko Haram Languish in Camp Near Capital

In its five-year effort to impose Islamic law in northeastern Nigeria, the Boko Haram extremist group has killed thousands of people and forced hundreds of thousands to flee. Some of those who ran for their lives now live in squalor on the edges of the capital, Abuja. Chris Stein reports for VOA.
Video

Video Detained Turkish Journalists Follow Teachings of US-Based Preacher

The Turkish government’s jailing of critical journalists has sparked international condemnation and is being seen as an effort to undermine the followers of an ailing Turkish preacher based in the United States. VOA religion reporter Jerome Socolovsky has more.
Video

Video Will Pakistan School Shooting Galvanize Pakistan Against Extremism?

The attack on a military school in Pakistan’s northwest city of Peshawar left 141 dead, including 132 children. Strong statements of condemnation poured in from across the world. The country announced three days of mourning, and the leadership, both political and military, promised retribution. VOA's Ayesha Tanzeem looks at how likely the Pakistani government is to clamp down on all extremist groups.
Video

Video ‘Anti-Islamization’ Marches Increase Tensions In Germany

Anti-immigrant rallies in Germany have been building in recent weeks, peaking Monday night in the city of Dresden where tens of thousands of people turned out to demonstrate against what they call the ‘Islamization’ of the West. Germany has offered asylum to more Syrian refugees than any other country, and this appears to have set off the protests. Henry Ridgwell reports from London.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.
Video

Video Refugees Living in Kenya Long for Peace in the Home Countries

Kenya is host to numerous refugees seeking safe haven from conflict. Immigrants from Somalia face challenges in their new lives in Kenya. Ahead of International Migrants Day (December 18) Lenny Ruvaga has more for VOA News from the Kenyan capital.
Video

Video Turkey's Authoritarianism Dismays Western Allies

The Turkish government has been defiant in the face of criticism at home and abroad for its raids targeting opposition media. The European Union on Monday expressed dismay after President Recep Tayyip Erdogan lashed out at Brussels for criticizing his government's action. Turkey's bid to be considered for EU membership has been on hold while critics accuse the NATO ally of increasingly authoritarian rule. Zlatica Hoke reports.

All About America

AppleAndroid