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EU leaders win breakthrough on budget deal

The new, unanimous, multi-year European Union budget, which includes the first cuts to EU spending in its history, determines what the bloc can spend on common infrastructure like railway or road projects, farming subsidies, and aid to poor countries. 

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Britain's Prime Minister David Cameron (l.) talks to France's President Francois Hollande (r.) during a European Union leaders' summit in Brussels, June 27, 2013.

Francois Lenoir/Reuters

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European Union leaders reached an outline deal Friday on the 27-country bloc's 960 billion euro ($1.3 trillion) seven-year budget, overcoming a British-French dispute to sign off on the agreement.

British Prime Minister David Cameron had held out for the same financial conditions already promised him months ago, overshadowing a summit meant to focus on the continent's youth unemployment problems.

However, in the end, all 27 nations backed the budget deal. EU President Herman Van Rompuy said "it is a quite clear 'yes'," when it came to unanimous backing of the 2014-2020 spending plan.

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Beyond the seven-year spending plan, which still needs full parliamentary approval, the EU nations also agreed on the shape of future bank bailouts, injecting a sense of fresh credibility into the efforts of the leaders to control the region's economic problems.

But the budget deal also highlighted deep divisions among European countries over whether to spend or cut their way out of crisis. The UK is seeking reassurances that it won't have to contribute too much at a time of belt-squeezing across the continent.

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