Lawmakers have approved a compromise struck last week on the multi-annual financial framework, the EU's budget for 2014-2020.

The deal left unchanged the total amount if the seven-year budget which was set at €960 billion at an EU leadership summit in February.

But the Parliament succeeded in including more flexibility so that unspent money can be transferred from one year to the next, or to priority areas, rather than returning it to national budgets as is currently the case.

"The European Parliament was realistic. The EU budget is financed by national budgets. National budgets are in ruins. It was not possible to obtain higher figures,” said French centre-right MEP Alain Lamassoure, chairman of the budgets committee who headed the Parliament's four-member negotiating team in talks with Council representatives and the Commission.

MEPs said the budget invests in programmes that will help lift the EU out of its economic doldrums, including:

  • €3.5 billion for the Fund for European Aid to the most deprived, an increase of €1 billion;
  • An additional €200 million for research in 2014-2015;
  • An additional €150 million for the Erasmus programme in 2014-2015;
  • €50 million for the COSME Programme to help the competitiveness of smaller businesses for 2014-2015;
  • Funding for the new programme dedicated to youth employment for 2014-2020, whereas governments only guaranteed funding for the first two years.

“This comprise will not save Europe but it will finance the most pressing issues and will launch a timetable for getting out of the current crisis," Lamassoure said.

A new clause will also allow the budget to be revised in 2016 for implementation in 2017. In the context of this review, a process of reforming the financing of the EU budget will be launched in the autumn.

"This agreement on the overall legislative framework allows negotiations to continue in order to clarify the distribution of funds within each policy," said Lamassoure.

The final legally binding vote in Parliament will only take place when the €11.2 billion needed to balance the 2013 budget is confirmed by the Council. That will happen in September or October.

The autumn vote will focus on a large package of legal documents, including the regulation containing the budget, and about 80 other pieces of legislation needed to implement it.

It will also include an inter-institutional agreement over how the budget can be spent, including statements from the three EU institutions on "own resources", or self-generated revenue.

A high-level group will undertake a general review of the own resources system to deliver a proposal to put on the table ahead of the adoption of the next budget period starting in 2020.