EU leaders praise austerity in agreement on 2012 budget

Nov 19, 2011, 14:41 GMT

Brussels - EU governments triumphed over members of the European Parliament in a budget fight concluded early Saturday, getting the legislators to agree to back away from a push for increased spending.

The agreement would see a 1.86-per-cent increase over 2011 levels for the 2012 budget, to 129 billion euros (174.5 billion dollars).

Earlier reports had labeled this as a 2.02-per-cent increase. However, that figure was reached before a 550-million-euro increase for the 2011 budget had been factored in.

Legislators had previously hoped for a 5.2-per-cent increase to 133.1 billion euros. The two sides now have two weeks to officially work out the details of this newest agreement, worked out in a 17-hour negotiating session.

'I'm really very relieved that we've reached an agreement,' said Polish financial state secretary Jacek Dominik after the 17-hour round of negotiations.

'This is an austerity budget,' said Janusz Lewandowski, the EU's budget commissioner, who had been pushing for a 132.7-billion-euro budget. 'This agreement is better than prolonging the dispute.'

But legislators who had hoped for more funding said parliamentary leaders had 'capitulated.'

This budget 'is a new victim of blind austerity policies,' said Isabelle Durant, a legislator from the Green party.

The final negotiations between the parliament and the member nations will be set against the backdrop of increasing austerity in Europe. With more countries seeking to slash their budgets, there are likely to be calls for less money to be sent to Brussels.

'With all the austerity measures among the member countries, we have to count every euro carefully,' said Dominik. He said that means savings have to be found in many EU institutions.

Furthermore, since every euro promised is not necessarily delivered, the EU will also be forced to slash spending projections for many of its agencies.

But Lewandowski reminded member nations that they have obligations to the EU.

'Even during times of austerity, bills have to be paid in a timely fashion. The budget must not become a hostage to the financial problems of the member nations.'

Two-thirds of the EU budget comes from member nations' payments. The rest is financed by taxes and customs.