European Union spending will total €135.5 billion in 2014 under a deal reached by EU negotiators yesterday, which included extra funds to fight soaring youth unemployment in the 28-nation bloc.

The deal, which cuts EU spending by about 6 per cent from this year, is the first to reflect the new terms for EU budgets from 2014-20 agreed by the bloc’s leaders in February and had little room to manoeuvre on the overall figures involved.

“I’m glad that we could reach an agreement with the European Parliament on the financing of priority areas such as growth, employment, innovation and humanitarian aid,” said Algimantas Rimkunas, deputy finance minister for Lithuania, which holds the EU’s rotating presidency.

The deal reached after more than 16 hours of negotiations includes up to €3.9 billion to support job creation, training and apprenticeships for the estimated 19 million young Europeans currently out of work.

But critics say the extra cash is a drop in the ocean, working out at about €200 for every unemployed young person.

The vast majority of EU spending – around two thirds of the total – will be spent on subsidies for European farmers and investment projects such as road construction in the bloc’s poorer central and eastern European member states.

Yesterday’s agreement must now be rubber-stamped by EU ministers and the full parliament before it can enter force.

The European Commission had originally proposed a budget of €136 billion for next year, which the Parliament had sought to increase to €136.4 billion.

As part of the earlier deal on the EU’s long-term budget, funds earmarked but not spent in a particular budget year can be carried over to the next year’s budget, subject to approval by EU governments.

The EU budget is equivalent to about 1 per cent of the bloc’s annual gross domestic product – a small fraction of total EU government spending of almost 50 per cent of GDP in 2012. (Reuters)