EU leaders edging towards compromise deal on 2014-2020 budget

PanARMENIAN.Net - EU leaders are edging towards a compromise deal on the 2014-2020 budget after all-night talks, officials say, according to BBC News.

A broad framework was reported to have been agreed, but hard bargaining still lies ahead at the Brussels summit. Leaders are studying proposals for a 908bn euro (£774bn) budget for the full seven years - 5bn euros lower than a proposal at a November summit. That meeting failed to reach agreement amid deep divisions among members over cuts - a key UK demand. Any one of the 27 member states can veto a budget deal - a fact which makes the negotiations all the more difficult.

Talks began later than scheduled on Thursday, January 7 evening after leaders explored possible compromises in small groups earlier in the day. The all-night talks appear to have cut an initial proposal of 913bn euros down to the figure of $908bn.

The latest proposal would also fix the ceiling for absolute spending at 960bn euros (£818bn), a cut of more than 12bn euros from the proposal in November. This figure relates to spending commitments - the maximum amount that can be allocated to programmes during the budget period. What is actually spent is usually lower, as projects are cancelled or postponed.

Failure to reach agreement on the seven-year budget would mean the EU rolling over annual budgets - a method that would be more expensive and would complicate long-term projects.

The 2013 EU budget is 132.8bn euros - a 2.4% increase on the 2012 budget. The latest proposal, if divided equally over the seven-year period, would equate to 129.7bn euros annually.

EU sources say the new proposal will cut transport, energy and telecommunications projects, as well as pay and perks for EU staff. If agreed, the cuts will make this the first multi-annual EU budget to see a net reduction.