EU Leaders Inch Toward Budget Deal At Tough Summit
By DON MELVIN and SARAH DiLORENZO
BRUSSELS (AP) â¿¿ European Union leaders agreed Friday to a significantly reduced 7-year budget worth â¿¬960 billion ($1.28 trillion) â¿¿ the first cut in spending in the 27-country group's history.
European Council President Herman Van Rompuy announced that the agreement had been reached after two days of nearly round-the-clock negotiations â¿¿ the longest negotiations of his tenure in office. The final total was about 40 billion less than the European Commission had originally proposed.
The issue of what to give to the EU was made more difficult because, he said, its members were struggling with poor economic growth and harsh austerity measures."We simply could not ignore the extremely difficult economic realities across Europe," Van Rompuy told reporters. "It had to be a leaner budget." He said it would amount to 1 percent of the European Union's gross national income. The final number was far less than the â¿¬1.03 trillion ($1.38 trillion) the EU's executive arm, the European Commission, had originally proposed. The â¿¬959.988 billion total will cover the years 2014-2020; the budget for the years 2007-2013 was â¿¬975.777 billion. The two-day fight over the cap on what the EU can spend on everything from infrastructure to development aid laid bare divisions over what the role of the union should be. "The effort was worth it," said German Chancellor Angela Merkel. "The agreement is good and important," she added, saying it would show solidarity and ensure predictability. The European Parliament must still approve the deal â¿¿ and lawmakers there suggested that the drastic cuts proposed would be unacceptable. "This agreement will not strengthen the competitiveness of the European economy but weaken it," said a statement by the leaders of the four largest political groups in the Parliament. "It is not in the prime interest of our European citizens."
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts