Breakthrough at EU budget summit

If the overall figures are finally agreed, it would be the first time the bloc has cut its budget in its 56-year history.

The only part of the budget to be secured substantially more money is 'competitiveness for growth and jobs' part, up from the current €91bn to €126bn. This is less than proposed originally by the Commission and also less than the €140bn proposed by Van Rompuy in November, when EU leaders failed to reach agreement on the new budget. It remains, however, the biggest hike on any part of the budget.

One of the key initiatives is the European Commission's flagship project, 'Connecting Europe', a plan to invest over €50bn in European transport, energy and internet infrastructures is to take a big hit in the draft budget, with only €29bn made available for it.

Of this €23bn is allocated for transport, €5bn for energy and €1bn for internet infrastructures. For other flag projects, Gallileo, ITER and GMES total €13bn is allocated.

In the budget tabled on Friday morning administration costs are also accepted to go up, from currently €57bn to €62bn in the future budget, which covers a period where EU will take on board minimum one new country, Croatia.

The EU institutions will have to reduce staff by five percent over the next four years. The remaining staff will have to work more for the same amount of money. Also, salaries of EU officials are set to be frozen for the next two years: "As part of the reform of the staff regulation, the adjustment of salaries and pensions will be suspended for two years."

The document tabled by EU president Herman van Rompuy keeps the rebates for Germany, the UK, the Netherlands and Sweden. Denmark is added to the list of countries getting an annual rebate of €130 million, while there is no mention of the Austrian annual €179 million rebate enjoyed over the last seven years.

The talks among all EU leaders resumed in the early morning hours of Friday and are still ongoing.