Following negotiations yesterday, the council of ministers and parliamentary representatives have reached a deal, which was required after MEPs voted against the council’s initial proposal last month.

The spending agreement falls between the rival budget commitments from the council of ministers, which proposed €134.8bn worth of spending, and the parliament, which amended the budget to stand at €136.1bn.

Overall, the budget, which is the first under the EU's new seven-year programme known as the Multiannual Financial Framework, has been cut by 9.4% compared to 2013.

The agreement includes more than €11.8bn to promote growth projects.

In addition, around €9bn will be spent on the EU’s Horizon 2020 research scheme, while €900m will be spent on initiatives to cut youth employment in member states. Commitments are also in place to provide an extra €3bn in future years.

MEP Anne Jensen, who is steering the 2014 budget through the European Parliament, claimed legislators had been able to increase spending on growth policies such as research, education and innovation.

Budgets committee chair Alain Lamassoure added: ‘Parliament has taken its responsibility by accepting a lower budget. But we managed to get the priorities right and prevent the EU from starting 2014, the first year under the new Multiannual Financial Framework, in the red.’

Lithuanian vice-minister of finance Algimantas Rimkūnas, who is chairing the council of ministers, said he was glad a deal had been reached.

It is now expected the parliament’s budget committee will approve the spending plans, and an update to the multi-annual financial framework, at a meeting on Thursday.

The European Parliament as a whole will then vote on the MFF on November 19, and the 2014 budget the following day.