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

Video For West Ukraine City, Conflict Far Away Yet Near

Physically and culturally close to Western Europe, Lviv feels solidarity with compatriots in country’s east but says they need to decide own future More

West African Women Disproportionately Affected by Ebola

Women's roles in families and the community put them at greater risk for contracting the disease, officials say More

Video NASA's MAVEN Spacecraft Arrives at Mars

Mars Atmosphere and Volatile Evolution craft will measure rates at which gases escape Martian atmosphere into space More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
NASA’s MAVEN Probe Enters Mars Orbiti
X
September 22, 2014 9:20 PM
NASA’s newest Mars probe, called MAVEN, has successfully entered its designated orbit around the Red Planet. Scientists will use its sophisticated instruments to try to learn what happened to the atmosphere Mars had a few billion years ago. VOA’s George Putic has more.
Video

Video NASA’s MAVEN Probe Enters Mars Orbit

NASA’s newest Mars probe, called MAVEN, has successfully entered its designated orbit around the Red Planet. Scientists will use its sophisticated instruments to try to learn what happened to the atmosphere Mars had a few billion years ago. VOA’s George Putic has more.
Video

Video For West Ukraine City, Conflict Far Away Yet Near

The western Ukrainian city of Lviv prides itself on being both physically and culturally close to Western Europe. The Russian-backed separatists in the eastern part of the country are 1,200 kilometers away, and seemingly even farther away in their world view. Still, as VOA’s Al Pessin reports, the war is having an impact in Lviv.
Video

Video Saving Global Fish Stocks Starts in the Kitchen

With an estimated 90 percent of the world’s larger fish populations having already vanished, a growing number of people in the seafood industry are embracing the concept of sustainable fishing and farming practices. One American marine biologist turned restaurateur in Thailand is spreading the word among fellow chefs and customers. VOA Correspondent Steve Herman reports from Bangkok.
Video

Video Chinese Admiral Key in China’s Promotion of Sea Links

China’s President last week wrapped up landmark visits to India, Sri Lanka and Maldives, part of a broader campaign to promote a new “Maritime Silk Road” in Asia. The Chinese government’s promotion efforts rely heavily on the country’s best-known sailor, a 15th century eunuch named Zheng He. VOA's Bill Ide reports from the sailor’s hometown in Yunnan on the effort to promote China’s future by recalling its past.
Video

Video Experts Fear Ebola Outbreak ‘Beyond Our Capability to Contain’

Each day brings with it new warnings about the deadly Ebola outbreak already blamed for killing more than 2,600 people across West Africa. And while countries and international organizations like the United Nations are starting to come through on promises of help for those most affected, the unprecedented speed with which the virus has spread is raising questions about the international response. VOA's Jeff Seldin has more from Washington.
Video

Video Natural Gas Export Plan Divides Maryland Town

A U.S. power company that has been importing natural gas now wants to export it. If approved, its plant in Lusby, Maryland, would likely be the first terminal on the United States East Coast to export liquefied natural gas from American pipelines. While some residents welcome the move because it will create jobs, others oppose it, saying the expansion could be a safety and environmental hazard. VOA’s Deborah Block examines the controversy.
Video

Video Difficult Tactical Battle Ahead Against IS Militants in Syria

The U.S. president has ordered the military to intensify its fight against the Islamic State, including in Syria. But how does the military conduct air strikes in a country that is not a U.S. ally? VOA correspondent Carla Babb reports from the Pentagon.
Video

Video Iran, World Powers Seek Progress in Nuclear Talks

Iran and the five permanent members of the U.N. Security Council plus Germany, known as the P5 + 1, have started a new round of talks on Iran's nuclear program. VOA State Department correspondent Pam Dockins reports that as the negotiations take place in New York, a U.S. envoy is questioning Iran's commitment to peaceful nuclear activity.
Video

Video Migrants Caught in No-Man's Land Called Calais

The deaths of hundreds of migrants in the Mediterranean this week has only recast the spotlight on the perils of reaching Europe. And for those forunate enough to reach a place like Calais, France, only find that their problems aren't over. Lisa Bryant has the story.
Video

Video Westgate Siege Anniversary Brings Back Painful Memories

One year after it happened, the survivors of the terror attack on Nairobi's Westgate Shopping Mall still cannot shake the images of that tragic incident. For VOA, Mohammed Yusuf tells the story of victims still waiting for the answer to the question 'how could this happen?'
Video

Video Whaling Summit Votes to Uphold Ban on Japan Whale Hunt

The International Whaling Commission, meeting in Slovenia, has voted to uphold a court ruling banning Japan from hunting whales in the Antarctic Ocean. Conservationists hailed the ruling as a victory, but Tokyo says it will submit revised plans for a whale hunt in 2015. Henry Ridgwell reports from London.
Video

Video A Dinosaur Fit for Land and Water

Residents and tourists in Washington D.C. can now examine a life-size replica of an unusual dinosaur that lived almost a hundred million years ago in northern Africa. Scientists say studying the behemoth named Spinosaurus helps them better understand how some prehistoric animals adapted to life on land and in water. The Spinosaurus replica is on display at the National Geographic museum. VOA’s George Putic has more.
Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.

AppleAndroid