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European cuts

European Union leaders agree 2014-2020 budget

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The agreement, which EU officials said would only be finalized later on Friday, strikes a tight balance between the demands of northern European countries such as Britain and the Netherlands that wanted a belt-tightening budget, and countries in the south and east such as France and Poland that wanted spending on farming subsidies and much-needed infrastructure.

The budget includes items meant to generate economic growth in the future, such as research and development, increasing digitalization and creating a new, more accurate satellite navigation system. It also funds regulation and administration in such areas as mergers and competition, the review of national budgets to ensure they do not include excessive deficits and — now — banking supervision.

The officials said around 12 billion euros would be cut from the last budget proposal, made at a summit in November when agreement eluded leaders, bringing the headline ceiling for spending down to 960 billion over the full 2014-2020 plan.

That represents a decrease of around three percent on the last multi-annual framework – the first time a long-term spending plan has seen a net reduction in the EU´s history.

The cuts agreed on Friday fell mainly on a new fund for cross-border transport, energy and telecoms projects, which was cut by more than 11 billion euros. Spending on agriculture was spared further cuts and there was an increase of about 1.5 billion euros on rural development over the seven years, satisfying France, Italy and others.

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