EU negotiators clinch deal on 2014 budget

Unemployed decorator Jose Oliver, 41, begs for money in Madrid, 29 October
Image caption People in Spain like in other poorer eurozone states have taken to begging to get by

Negotiators in Brussels have clinched a deal on the 2014 EU budget after a night of hard talks, cutting spending by about 6% compared to 2013.

Spending will total 135.5bn euros (£113.3; $181.3bn), or 0.5bn less than the Commission sought and 0.9bn short of the European Parliament's target.

However, the budget is 0.5bn euros bigger than what austerity-conscious government leaders were demanding.

It reflects stricter new terms agreed by EU leaders in February.

There will be greater funding for economic growth, jobs, innovation and humanitarian aid, Lithuania's Deputy Finance Minister Algimantas Rimkunas said in a statement. His country currently holds the six-month rotating EU presidency.

EU agencies dealing with migration, asylum and border control will also be strengthened, as will the European financial supervisory authorities, he added.

About two-thirds of the budget will go on subsidies for farmers and on development projects in the EU's poorer regions, as in previous years. But the spending on such projects - called the "cohesion" budget - is being cut by about 7bn euros.

Four governments voted against the compromise deal - the UK, Denmark, the Netherlands and Sweden, German ARD television reported. They wanted the EU to make deeper cuts.

The Economic Secretary to the UK Treasury, Nicky Morgan, said the deal showed that Prime Minister David Cameron's influence was "genuinely bearing down on EU spending".

"However, the final budget wasn't low enough to gain UK backing. When governments and families across Europe are taking difficult decisions to make savings, it would be wrong and irresponsible for the EU to not show similar restraint," he said.

The deal was reached early on Tuesday after 16 hours of negotiation, and still requires final approval from the parliament and EU ministers next week.

'Step in right direction'

The UK Conservative leader in Europe, Richard Ashworth MEP, welcomed "what is an effective freeze of the EU budget - headline spend is still set to fall by 6%".

He said that "alongside the historic 3.8% reduction which we have secured on the EU's long-term budget, this is further evidence of us bringing genuine discipline to EU spending".

"It is particularly welcome that money has been switched away from less-useful budget headings to the important areas of research and development, education, training and jobs," he added. He called the budget "a step in the right direction".

For the UK Liberal Democrats, George Lyon MEP said the budget deal boosted research and development funding by 200m euros compared to the original Commission proposal. "That means more money for UK universities, who currently receive more EU research funding than any other country," he said.

Derek Vaughan MEP of the UK Labour Party urged the government to spend EU funds on "important infrastructure, training and research projects, and to help combat youth unemployment".

There remains some opposition to the deal in the European Parliament, however.

Helga Truepel MEP of the Greens said it was "a bad deal that will continue the perpetual cycle of EU under-budgeting".

"With the budget to be reduced 6% compared with 2013, the outcome is not only devoid of ambition, it will also lead to a situation again next year where the EU is facing budget shortfalls compared with programmed spending."

The deal, once signed off, should pave the way for the European Parliament to adopt the EU's long-term trillion-euro budget for 2014-2020.

At the same time, the negotiators in Brussels agreed to allocate an extra 3.9bn euros to pay outstanding bills for 2013 incurred in cohesion projects.

An additional 400.5m euros will also be spent from the EU "solidarity" fund to help areas of Germany, the Czech Republic, Austria and Romania which were hit by flooding this year.

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