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

African States Push to Keep Boko Haram Offline

Central African telecoms ministers working with Nigeria to block all videos posted by Boko Haram in effort to blunt Nigerian militant group's propaganda More

Falling Oil Prices, Internet-Savvy Youth Pose Challenge for Gulf Monarchies

Across the Gulf, younger generations are putting a strain on traditional politics More

Philippines Call Center Workers Face Challenges

Country has world’s largest business process outsourcing, or BPO, industry, employing some one-million workers More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
US Supreme Court Hears Hijab Discrimination Casei
X
Katherine Gypson
February 25, 2015 11:30 PM
The U.S. Supreme Court has heard opening arguments in a workplace religious discrimination case that examines whether a clothing store can refuse to hire a young woman for wearing the headscarf she says is a symbol of her Muslim faith. Katherine Gypson reports from the Supreme Court.
Video

Video US Supreme Court Hears Hijab Discrimination Case

The U.S. Supreme Court has heard opening arguments in a workplace religious discrimination case that examines whether a clothing store can refuse to hire a young woman for wearing the headscarf she says is a symbol of her Muslim faith. Katherine Gypson reports from the Supreme Court.
Video

Video Falling Gas Prices Hurt Nascent Illinois Hydraulic Fracturing Industry

Falling oil prices are helping consumers purchase cheaper petroleum at the pump. But that’s made hydraulic fracturing or “fracking” less economically viable for the companies in the United States invested in the process. VOA’s Kane Farabaugh reports on one Midwestern town that was hoping to change its fortunes by cashing in on the next big U.S. oil boom.
Video

Video Fighting in Sudan's South Kordofan Fuels Mass Displacement

Heavy fighting in Sudan's South Kordofan state is causing hundreds of thousands to flee into uncertain conditions. Local aid organizations estimate as many as 400,000 civilians have been internally displaced since the conflict began more than three years ago, while another 250,000 have fled across the border to refugee camps in South Sudan. VOA's Adam Bailes reports.
Video

Video Lao Dam Project Runs Into Opposition

A Lao dam project on a section of the Mekong River is drawing opposition from local fishermen, international environmental groups and neighboring countries. VOA's Say Mony visited the region to investigate the concerns. Colin Lovett narrates.
Video

Video A Filmmaker Discovers Her Biracial Identity in "Little White Lie

Lacey Schwartz grew up in an upper middle-class Jewish family, in a town in upstate New York where almost everyone she knew was white. She assumed that she was, as well. Her recent documentary, Little White Lie, tells the story of how she uncovered the secret of her true racial background. VOA’s Carolyn Weaver has more on the film.
Video

Video Deep Under Antarctic Ice Sheet, Life!

With the end of summer in the Southern hemisphere, the Antarctic research season is over. Scientists from Northern Illinois University are back in their laboratory after a 3-month expedition on the Ross Ice Shelf, the world’s largest floating ice sheet. As VOA’s Rosanne Skirble reports, they hope to find clues to explain the dynamics of the rapidly melting ice and its impact on sea level rise.
Video

Video US-Cuba Normalization Talks Resume Friday

Negotiations aimed at normalizing diplomatic relations between the U.S. and Cuba resume Friday. On the table: lifting a half-century trade embargo and easing banking and travel restrictions. There's opposition in Congress, but some analysts say there may be sufficient political and economic incentives in both nations for a potential breakthrough this year. VOA's Mil Arcega reports.
Video

Video Pakistan's Deadline For SIM Registration Has Cellphone Users Scrambling

Pakistani cell phone users have until midnight Thursday to register their SIM cards, or their service will be cut off. While some privacy experts worry about government intrusion, many Pakistanis are just worried about keeping their phone lines open. VOA Deewa reporter Arshad Muhmand has more from Peshawar.
Video

Video Myanmar Warns Factory Workers to End Strikes

Outside Myanmar's main city Yangon, thousands of workers walked off their jobs earlier this month demanding a doubling of their wages, pay raises after a year and input from labor unions on industrial regulations. Since Friday, the standoff has grown more tense as police moved in to disrupt the sit-ins, resulting in clashes that injured people from both sides. VOA correspondent Steve Herman visited industrial zones which have become a focus of Myanmar's fledgling workers rights movement.
Video

Video Oscar Winners Do More Than Thank the Academy

The Academy Awards presentation is Hollywood’s night to reward the best movies from the previous year. It’s typically a lot of glitter, a lot of thank you’s, a lot of speeches. But many of this year’s speeches carried messages beyond the thank you's. VOA’s Carolyn Presutti takes a look.

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More