EU Budget is Agreed with 34 billion in Cuts

European leaders have finally agreed a budget deal for the rest of the decade after a marathon 25-and-a-half hour negotiation session in Brussels, that will lead to the first cut in EU spending in its 56-year history.

Herman Van Rompuy, the president of the European Council who chaired the negotiations, broke the news on Twitter. He tweeted at 4.22pm local time on Friday: “Deal done! #euco has agreed on #MFF for the rest of the decade. Worth waiting for.”

David Cameron, who had demanded a cut or at least a freeze in real terms in the near €1tn (£850bn) budget, will claim victory after the European Council president proposed a €34.4bn cut over the next seven years.

Van Rompuy finally clinched the deal after all-night talks, which finally took shape when he tabled budget proposals at 6am following a night of haggling at the EU summit that was described by one official as “like a bazaar”.

Cameron had sustained himself through the night with Haribos sweets and copious cups of coffee from a Nespresso machine in the UK delegation room at the EC’s Justus Lipsius building.

Shortly before 6.30am, the EU’s 27 leaders filed into the Council chamber to debate Van Rompuy’s proposal to cut the “payment ceiling”, likened to a credit card limit, for the next seven-year budget from €942.8bn to €908.4bn. This represents 0.95% of EU GNI – slightly below the 1% demanded by the German chancellor, Angela Merkel.

via Guardian

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza