EU Leaders Agree Historic Budget Deal

Written By Unknown on Jumat, 08 Februari 2013 | 22.56

European Union leaders have agreed a historic budget deal at a summit in Brussels.

The breakthrough was declared in a tweet from the President of the European Council, Herman Van Rompuy, saying: "Deal done! #euco has agreed on #MFF (Multi-annual Financial Framework) for the rest of the decade. Worth waiting for."

Initial reports said the agreement fixes a spending limit of 960bn euros (£820bn) for projects the EU can promise to fund between 2014 and 2020. That is far less than the 1.03tn euros (£871bn) that the EU Commission originally proposed, reflecting Europe's tough economic times.

But not all those projects will ever be completed, meaning the maximum amount it will ever pay out is 908.4bn euros (£774bn).

The current spending limit is 942.8bn euros (£803.4bn) so the actual spending cap will be reduced by 34.4bn euros (£29.3bn).

However, the EU Parliament must still approve the deal - and they have suggested that such drastic cuts are unacceptable.

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