EU parliament finally approves budget cut

BRUSSELS (AP) The European Union's parliament on Tuesday finally approved the first spending cut in the history of the 28-nation group.

Over two years of haggling ended when the EU legislature approved the budget, which will fall to 960 billion euros ($1.3 trillion budget), from 975 billion euros, for the seven years between 2014 and 2020.

The cut had been sought by several EU countries which wanted to see austerity at the EU level at a time when many were pursuing cutbacks at home.

EU President Herman Van Rompuy called the spending commitments "a realistic budget for Europe" which has been struggling through years of financial crisis.

The budget fell some 40 billion euros short of the first proposals of the EU head office which had wanted more clout to push through investment and employment programs.

Britain had been first in line to hammer home the message that the EU should limit spending, if only to contain its ambitions to encroach on national policies.

"The difficult budgetary situation in the member states has resulted for the first time in a lower budget," said Jean-Luc Dehaene, who negotiated the deal for the parliament. He saw difficult times ahead.

"This is especially problematic as in times of national austerity the EU budget should be higher to compensate for declining investments in the member states."

The Parliament meeting in Strasbourg, France, approved the budget by 537 votes to 126, with 19 abstentions. The member states only need to reconfirm the agreement in the coming weeks, which is not expected to pose any problem.

Also on Tuesday, the EU's highest court ruled that the member states were within their rights to block automatic pay increases for EU officials in 2011 amounting to 1.7 percent.

The European Court of Justice ruled that EU nations were within their rights to consider the economic downturn sufficed to block the increase.

Again, Britain was happy to applaud the ruling.

"When governments and families across Europe are taking difficult decisions to make savings, it would be wrong and irresponsible for the EU to not show similar restraint," said Nicky Morgan, a British Treasury minister.