European Union Leaders Are On The Brink Of A Historic Budget Deal

david cameron

Photo: Jeff J. Mitchell / Getty Images

European Union leaders are on the brink of an historic agreement to cut their seven-year budget by £30bn today after marathon all-night talks in Brussels.They edged towards agreeing the first-ever reduction in EU spending in what David Cameron would claim as a victory for the calls for budgetary restraint by him and like-minded leaders.

Fifteen hours after a draft budget for 2014-20 was due to be discussed by the 27 leaders at their Brussels summit, firm figures were finally presented to them at 5am today by Herman Van Rompuy, who chairs the talks as president of the European Council.

If the deal is agreed, Mr Cameron will hail it as a victory for his tough approach, which saw him demand tens of billions of euros be shaved off plans first proposed last autumn. The cuts could cut EU spending to about €500m a year below that.

Last November, the EU leaders were deadlocked over Mr Van Rompuy’s plan to commit €973bn to EU programmes between 2014-20. Today’s draft agreement would reduce that to €960bn.

A second figure on actual payments, the so-called “credit card limit,” would be set at €908.4bn over the seven years.

Mr Cameron, who demanded either a real terms budget freeze or cut, will be able to claim he has achieved his objectives. The draft conclusions show that he has seen off moves led by France to reduce the €3.5bn-a-year rebate on Britain’s payments to the EU won by Margaret Thatcher. They say: “The existing correction mechanism for the UK will continue to apply.”

Britain’s annual contributions are still likely to rise over the seven-year period. But Mr Cameron can blame that on Tony Blair, who agreed to reduce the value of the rebate in 2005 as the EU expanded to admit central and eastern European nations.

The Prime Minister worked through the night without a break, either in formal round table sessions with all 26 other leaders or in small huddles as painstaking efforts to reach a compromise continued.

After clashing with Francois Hollande, the French President, who opposed his demand for cuts and failed to turn up for talks with him and Germany’s Angela Merkel yesterday, the three leaders finally held 15 minutes of peace talks early today when the full summit took a break.

The cuts are likely to include the Brussels administration budget, which was targeted by the Prime Minister. A two-year pay freeze for 55,000 EU officials is one option on the table.

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