Agreement Reached on E.U.’s Seven-Year Budget

European Parliament leaders and member states finally reached a deal on the 2014-2020 budget that had been blocked by parliament since February. The deal will speed up spending on youth unemployment, according to the European Commission President Jose Manuel Barroso. It mobilizes earlier than planned nearly $8 billion to help with the issue of growing unemployment in the eurozone.

U.K. Prime Minister David Cameron says the $1.3 trillion budget cuts real spending for the first time, but the change brokered by the European Parliament means that unspent funds will now be transferred ahead to the next year rather than returned to national budgets. This transfer forward means it is possible for spending to actually rise, according to BBC analyst Chris Morris. In the current budget, tens of billions of euros have been left unspent and returned to national coffers.

If the new budget is ratified in September by unanimous approval of the governments and majority support from Parliament, as it looks likely, future unspent euros will become a surplus for the E.U. to increase spending and manage crises as necessary.

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