Budget 2012

Representatives of the European Union's 27 national governments in Brussels on Saturday agreed to a budget for 2012, raising spending by 2 percent over the previous year to 129 billion euros ($174 billion).

"The agreement was reached unanimously," said Jacek Dominik, under-secretary of state for finance in Poland, which holds the rotating EU presidency. EU countries held a marathon meeting on Friday that lasted into the early hours of Saturday.

The spending increase was below EU inflation, which was measured at 3.4 percent in October.

The agreement is short of the amount requested by the European Parliament, which sought 133 billion euros, or an increase of 5.2 percent over 2011 spending. Without the European Parliament's approval, the budget cannot pass.

"What sort of signal would Europe send to markets and 500 million Europeans if we don't manage to agree on our common budget," the EU's Polish budget commissioner Janusz Lewandowski warned the parties ahead of the long night of negotiations.

Member states have sought to walk a careful line between austerity and spending to boost economic growth. The European Parliament is typically more in favor of higher spending than the member states, which ultimately have to foot the bill.

Britain, the Netherlands, Austria, Finland, Denmark and Sweden in particular had said the parliament had asked for too much money.

Looming negotiations among the parliament and the member nations will be set against the backdrop of increasing austerity in Europe. As more countries cut their budgets, government are likely to try to reduce how much they send the EU.

Author: Andrew Bowen (AFP, dpa)

Editor: Sean Sinico