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Merkel joins Cameron to push EU to trim budget

Published: 08 Feb 2013 16:39 GMT+01:00
Updated: 08 Feb 2013 19:17 GMT+01:00

"Deal done! Worth waiting for," European Council President Herman Van Rompuy wrote on the online message service Twitter.

Negotiating for nearly 26 hours with little break, Merkel, backed by British Prime Minister David Cameron, led a sustained push for the EU budget for 2014-2020 to share in the austerity national governments are facing. The tentative agreement would trim spending by three percent over the rest of the decade.

"In my opinion this is a good deal and it is important," said Merkel. "The effort was rewarded."

France, along with Italy, fought to protect spending it sees as essential to boost growth and jobs at a time of record unemployment, but indications early Friday were that Paris could live with the deal.

"It is not a fantastic compromise deal but it is acceptable," said a French diplomatic source.

A draft deal sets the 2014-20 actual spending or "payments" at €908.4 billion ($1.2 trillion), with an absolute ceiling of €960 billion for spending "commitments" to the budget.

The latest figures would represent a 3.0 percent cut from the 2007-13 budget and were less than the €973 billion that Cameron and northern EU allies such as the Netherlands rejected at a budget summit in November that collapsed without any deal.

In the EU budget process, commitments refer to the maximum amount that can be allocated to programmes while actual spending or "payments" is usually lower as projects are delayed or dropped.

Originally, the European Commission had wanted a 5.0 percent increase in commitments to €1.04 trillion ($1.4 trillion) – about one percent of the EU's total gross domestic product.

After a six-hour delay Thursday, leaders thrashed out the details overnight before breaking in the morning.

Amid the cuts, they also managed to find €6 billion for a new fund to tackle youth unemployment. Jobless numbers across the EU are currently over 26 million, with nearly three out of five under the age of 25 out of work in Spain and Greece.

But there is another important hurdle still to clear – the European Parliament must approve the deal and lawmakers have already made clear they are in no mood for more austerity.

Parliament head Martin Schulz said bluntly on Thursday that he and the assembly would not accept a budget which would compromise EU programmes and undercut its future. "That's called a deficit. I won't sign a deficit budget anymore," he said.

The draft showed key budget areas – the Common Agricultural Policy support payments to farmers and Cohesion Funds, a crucial source of money for new EU members seeking to catch up with their peers – to be largely untouched compared with the November figures.

But plans to use €40 billion to leverage private investment in cross-border energy, transport and digital networks was slashed by a quarter and EU administrative expenditures were cut as well. Some of the roughly 35,000 EU civil servants have already begun strike action over fears they will lose their jobs and the perks.

AFP/DPA/The Local/mry

The Local (news@thelocal.de)

Your comments about this article

17:20 February 8, 2013 by Englishted
Still too high .
18:04 February 8, 2013 by yllusion
They also should reduce the number of politicians there doing nothing but getting a nice salary, and stop with this Brussels Luxembourg Strasbourg nonsense.
20:21 February 8, 2013 by Kennneth Ingle
Yes you are quite right. Europe was good idea, but, it has turned into an enormous head without a brain. It is a sure sign that something has seriously gone wrong, when even politicians are beginning to realise how dangerous the waste of taxpayers money can be. Usually these heads of state have no conscience themselves, when it comes to spending other peoples cash, so we can be thankful that (hopefully), they are beginning to wake up. Why for example do we pay for industrial and scientific research, but when something new is discovered or invented, the profits pass into private hands.

The EU budget could, by cutting unnecessary expenditure be more than halved. Many of the laws and regulations, (just think of the regulated size and shape of apples and cucumbers), make no sense whatsoever, but cause tremendous costs in production and handle. The only real way to deal with the increase of size of and wastage in, this bureaucratic monster, is for the member states to reduce the parliament and civil-servants employed by 50% and to insist that for every new regulation two older ones be cancelled.
00:26 February 9, 2013 by Brint
I notice that Angela and Dave appear to be sticking close together lately, I know I'll get flak for even daring to suggest it, but in my view I believe that if two countries in Europe should really get on and work well together as natural allies then it would be Britain and Germany.

"Britain becomes Germany's biggest trade partner as Berlin-London pact deepens."

"Britain has overtaken France to become Germany¦#39;s biggest global trade partner for the first time in the modern era, solidifying the emergence of a ¦quot;special relationship¦quot; between Europe¦#39;s two like-minded northern powers."

http://tinyurl.com/as5kuwe
07:18 February 9, 2013 by McM
A step in the right direction at last. Some pragmatic outcomes and at last a willingness by some leaders to tackle the sacred cow mindset in Brussels that has been and,still is pushing for unrealistic open cheques from member countries. Who by the way,are not in the position to dish out so much money to Herr Shultz and the snouts in the trough free lunch club that can't see beyond their cosy EU office and perks. If the EU can't handle review and change of itself it not viable in the flexible world with live in.
08:54 February 9, 2013 by Zubair Khan
When British PM made historic speech on the future of EU it revealed him a visionary leader. Leaders of such clear thinking and vision are seldom born in history. Again he proved himslef a legend in EU budget matter. Even iron lady of Germany found no other way but to agree. Though to save her face the Local reporting the news differently. It reported in following words,¦quot;Deal done! Worth waiting for,¦quot; European Council President Herman Van Rompuy wrote on the online message service Twitter.Negotiating for nearly 26 hours with little break, Merkel, backed by British Prime Minister David Cameron, led a sustained push for the EU budget for 2014-2020 to share in the austerity national governments are facing. The tentative agreement would trim spending by three percent over the rest of the decade.¦quot;In my opinion this is a good deal and it is important,¦quot; said Merkel. ¦quot;The effort was rewarded.¦quot; Those who have close eyes on the situation know it well it is the British PM who gets credit for this bold, clear and visionary stand. Well done British PM David Cameron you are the real champion of EU.
09:46 February 10, 2013 by Englishted
4 net payers and 23 net gainers ,it is rather strange it passed at all.
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