Europe hammers out seven-year budget deal

The European Union edged closer to a seven-year budget after negotiators backed down from demanding an €11.4bn increase, breaking a four-month deadlock.

After talks lasting seven hours, Austrian finance minister Karl-Heinz Grasser, representing EU governments, agreed last night to add an extra €2bn to the €830bn budget for 2007-2013, drafted by EU leaders in December, said Nikola Doing, spokesman for the Austrian EU presidency.