European Commission President Jose Manuel Barroso on Thursday announced a political deal on the EU's hotly contested budget for 2014, hours before an EU summit will consider how to get millions of jobless young people back into the workplace.

Barroso said a deal on the 960 billion euro ($1.25 trillion) budget was reached at emergency breakfast talks he called between the Commission, which is the EU executive, the European Parliament leadership and Ireland, which holds the rotating EU presidency.

The high-level compromise, which follows months of bitter dispute between European Union institutions and European capitals over the budget, must still be formally approved by 754 lawmakers.

At a summit in February, Britain, backed by Germany and the Netherlands, shot down a Commission bid to increase the budget by 5 percent as unacceptable in times of austerity.

Instead, EU leaders for the first time agreed to cut spending - by 3 percent - but this sparked an uproar, with MEPs saying funds were needed to bring back growth and jobs to struggling Europe.

European Parliament President Martin Schulz, who was scheduled to meet leaders of the parliament's groups later on Thursday, said it was "not an easy compromise" and that he would now have to battle to win support from a majority of MEPs to back a cut in the budget.

However, if MEPs approve the budget, next year the EU will be able to use 3.6 billion euros of a 6 billion euro fund set aside to help jobless youngsters.

Youth unemployment

Barroso had called the breakfast talks in hopes of unlocking the EU's next seven-year budget, as the bloc's 27 heads of state and government gather for a two-day summit where youth unemployment tops the agenda.

"Today, we have agreed on this budget that will make investment in Europe possible," Barroso said. "This is the growth fund for Europe."

Leaders were scheduled to agree to quick spending on jobs and training for the 5.6 million people aged under 25 who are unemployed across the EU, victims of years of tough austerity policies enforced to beat Europe's debt crisis.

Unemployment is at a record high across the bloc, particularly for the young, who have been disproportionately punished by years of crisis and recession. Germany has dashed hopes of investing any new money to ease the problem.

Welcoming the morning breakthrough, Irish Prime Minister Enda Kenny said, "What we have to do now is see that these monies are channeled into an effective program so people across the EU can find jobs."

Kenny will also need to get agreement from all 27 EU nations.

Parliament recently refused a compromise deal. It demanded greater flexibility in the budget, for example allowing funds not used in one area to be transferred to another sector.

MEPs also want a mid-term review in the hope that if the economy picks up, the spending constraints might be eased.

AFP-AP

(China Daily 06/28/2013 page11)