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.
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.
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.
The multi-annual budget, which includes the first cut 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. It's separate from national budgets — and much smaller — but a source of difficult and passionate debate.
The decision came after some protracted brinkmanship following the British objections to an outline reached early Thursday. Cameron surprised many by insisting that the EU stick to parts of an earlier agreement reached in February.
Due to a provision on agricultural funding, the country could have lost some of its previously negotiated repayment from the budget, costing it about an annual 200 to 300 million euros, a diplomat from a major EU country said.
The issue left London up against Paris, which would have to pay for the bulk of the shortfall otherwise, the diplomat said. He spoke on condition of anonymity because he wasn't allowed to discuss the closed-door talks publicly.