20 Nov 2011

EU spending to rise

7:09 am on 20 November 2011

The European Union has been forced to accept a 2% rise in its budget next year - much less than the increase it wanted.

Several EU governments, including Britain, argued the demands by the European Parliament and Commission were "unrealistic" in a time of austerity.

EU negotiators settled for 2% after 15 hours of talks ending early on Saturday.

The BBC reports the European Commission and European Parliament asked for 4.9% and 5.2% respectively.

The 2% increase for 2012 will take the budget up to 129 billion euros.

However, there are concerns that the EU's spending commitments have not been cut accordingly.

But member states agreed to allow EU spending commitments to rise to 147 billion euros.

EU Budget Commissioner Janusz Lewandowski said this could lead to a hole in the accounts.

Last year more than 80 billion euros of the budget was allocated to farming subsidies and regional development spending.