Friday, March 26, 1999 Published at 12:19 GMT
Business: The Economy
Euro budget breakthrough
Chirac and Schröder: Tough talking between all leaders
European Union leaders have finally reached agreement on a complex reform of the organisation's 85bn euro (£60bn, $93bn) budget.
The new budget guidelines cover the next seven years, until 2006, and pave the way for new members to join the European Union. These include Poland, Hungary, the Czech Republic and Cyprus.
The mixture of compromises reached reflects differing national demands. France stood staunchly by its farmers, Spain defended its development aid and the UK refused to leave without its special budget rebate intact.
The agreement curbs the farm subsidies that eat into 42% of the EU's annual budget, although not as much as many had hoped.
It also reallocates spending on poor regions, which eats up another third of the budget. Again cuts are not quite as drastic as first planned.
Currently every country sends a proportion of its VAT revenue to Brussels. By 2004 much of the budget contributions will be calculated as a proportion of Gross National Product.
UK rebate saved
The Netherlands fared better. Its annual net contribution to the EU budget will be lowered by "a bit more" than 1.3bn euros, according to the Dutch Finance Minister Gerrit Zalm.
"Our net contribution remains as it is," Prime Minister Tony Blair told a news conference. "Not a euro more, not a euro less."
'Good moment for Europe'
The German hosts of the summit, current holders of the rotating EU presidency, were clearly relieved that they had managed to secure a breakthrough.
However, he admitted that Germany had failed to push through its demands.
The French Prime Minister Lionel Jospin called the breakthrough "a good moment for Europe".
Belgian's Finance Minister Jean-Jacques Viseur, spoke of a "good agreement" but regretted that "a number of savings had to be postponed".
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