Negotiators in Brussels have clinched a deal on the 2014 EU budget after a night of hard talks, cutting spending by about 6% compared to 2013.
Spending will total 135.5 billion euros (181.3 billion), or 0.5bn less than the Commission sought and 0.9bn short of the European Parliament’s target.
However, the budget is 0.5 billion euros bigger than what austerity-conscious government leaders were demanding.
It reflects stricter new terms agreed by EU leaders in February.
About two-thirds of the budget will go on subsidies for farmers and on development projects in the EU’s poorer regions, as in previous years. But the spending on such projects – called the “cohesion” budget – is being cut by about 7 billion euros.
Negotiators in Brussels have clinched a deal on the 2014 EU budget after a night of hard talks
Four governments voted against the compromise deal – the UK, Denmark, the Netherlands and Sweden, German ARD television reported. They wanted the EU to make deeper cuts.
The deal was reached after 16 hours of negotiation, and still requires final approval from the parliament and EU ministers next week.
There remains some opposition to the deal in the European Parliament, however.
The deal, once signed off, should pave the way for the European Parliament to adopt the EU’s long-term trillion-euro budget for 2014-2020.
At the same time, the negotiators in Brussels agreed to allocate an extra 3.9 billion euros to pay outstanding bills for 2013 incurred in cohesion projects.
An additional 400.5 million euros will also be spent from the EU “solidarity” fund to help areas of Germany, the Czech Republic, Austria and Romania which were hit by flooding this year.
EU talks about 2013 budget have collapsed, after negotiators from the EU and member states were unable to agree on extra funding for 2012.
The EU Commission and European Parliament had asked for a budget rise of 6.8% in 2013.
But most governments wanted to limit the rise to just 2.8%.
The failure of the talks will dent hopes of agreement on the 2014-2020 budget, which is up for discussion later this month, correspondents say.
Friday’s dispute was over an extra 9 billion euros ($12 billion) in “emergency funding” for 2012, to cover budgets for education, infrastructure and research projects.
But Germany, France and other governments questioned the funding, and eight hours of talks produced no agreement.
“Under these conditions, we felt that negotiations which hadn’t really begun by six o’clock in the evening couldn’t reasonably be expected to finish during the night,” said the parliament’s lead negotiator, Alain Lamassoure.
At the European parliament, UK Conservative MEPs clashed with Parliament President Martin Schulz, a German Social Democrat, over the extra 9 billion euros shortfall for 2012.
In 2012 the budget was 129.1 billion euros, a 1.9% increase on 2011.
Among the schemes facing a shortfall this year is the Erasmus student exchange programme.
It has allowed nearly three million young Europeans to study abroad since it was launched 25 years ago.
In an open letter to EU leaders on Friday more than 100 famous Europeans, including film directors and footballers, warned that “thousands could miss out on a potentially life-changing experience”.
Friday’s talks did produce a declaration of political will to provide 670 million euros to earthquake victims in Italy, but no agreement on how to finance it, the European Parliament said.
It said that if no agreement on the 2013 budget could be reached in the next 21 days, the European Commission would look to revise its budget proposal.
The UK’s Financial Secretary to the Treasury, Greg Clark, said the EU needed to practice “fiscal discipline”.
“The UK and a number of other countries were very clear from the outset that the Commission and the European Parliament should not be asking taxpayers for billions of extra euros when the spending in member states is being reduced,” he said.
The UK government, led by the Conservatives, has also objected to a proposed increase in the multi-year budget for 2014-2020, threatening a veto if necessary.
An EU summit aimed at reaching a deal on that budget will be held on 22-23 November.