Negotiators from the Council for the European Union and the European Parliament agreed an EU budget for 2014 in the early hours of November 12, bringing the prospect of an agreement on financing for the 2014-2020 period a step closer, writes news website EUobserver.

The agreement will see a budget of €142.6bn in commitments and €135.5bn in payments, and is €400m less than the amount requested by MEPs last month, but €500m more than had been initually called for by government leaders. It also equates to almost a 5 per cent drop in spending compared to the 2013 budget.

All EU departments, except for EU administration, will face budget cuts, with EU cohesion funding, including the structural fund grants offered to the EU’s most impoverished countries, set to witness the largest cuts totalling almost €7bn. The websites adds –

Member states will also cough up more money to allow the EU's solidarity fund to pay out €400.5m in compensation to regions in Austria, the Czech Republic, Germany and Romania, which were affected by violent floods last spring.

The agreement will now be presented before MEPs for approval at a plenary meeting of the European Parliament in Strasbourg next week.