By Judith Ugwumadu | 3 December 2013

The European Union has finally agreed its seven-year budget framework from 2014 after two and a half years of negotiations.

The union’s council of ministers yesterday approved the Multiannual Financial Framework to run from next January to 2020, after a dispute with the European Parliament over the plans was resolved last month.

The MFF sets the maximum annual amount the EU can spend in different policy areas, and allows some payments to be spread over 5 years. Overall, the MFF commits the EU to spend nearly €960bn over the period, down 3.5% compared to the framework which ends this month, and total spending amounts to 1% of EU gross national income compared to 1.12% for the 2007-2013 MFF.

A statement announcing the deal said the framework had a ‘strong emphasis’ on expenditure aimed at boosting growth and creating jobs, in line with the political priorities of the EU. For instance, the expenditure ceiling for the ‘competitiveness’ increased by more than 37% compared to the current MFF.

Overall, funds from the budget will be split five ways over the period: smart and inclusive growth, 47%; sustainable growth, 39%; Global Europe and administration, 6%, each respectively; and security and citizenship, 2%.

The EU said this new budget ‘reflected the particular budgetary pressure that member states currently faced at national level’.

A statement added: ‘Apart from ensuring budgetary discipline for the EU and translating political priorities into figures the MFF’s aim is also to facilitate the adoption of the EU annual budget.

‘[This] decision marks the end of two and a half years of negotiations and allows the new generation of EU spending programmes to be implemented as from 1 January 2014.’

The EU said that the commitment ceiling amounts to 1% of EU gross national income compared to 1.12% for the 2007-2013 MFF.

Following negotiations, the European Parliament last month approved EU’s MFF by 537 votes to 126 against.