EU govts, parliament reach long-term budget deal

STRASBOURG, France, Apr 5 (Reuters) The European Parliament and EU governments reached an agreement on the 2007-2013 budget, increasing spending slightly and averting a threat of financial disarray in the bloc.

The deal boosted the seven-year spending level to 864.4 billion euros (1,053 billion dollar) from 862.4 agreed by EU leaders in December and gave European Union institutions some flexibility in using unspent funds, said Austrian Finance Minister Karl-Heinz Grasser.

''We have an agreement. The EU now has a stable basis for financing,'' Robert Soltyk, the executive European Commission spokesman for the budget, told Reuters.

Parliament had initially demanded 12 billion euros (14.62 billion dollar) in extra funds for trans-European motorways and railways, research and development as well as educational projects.

Governments argued spending must not grow too fast at a time when many countries are fighting to tame high budget deficits.

To sweeten the deal EU governments offered greater flexibility in reallocating unspent funds and giving parliament more say in a planned review of the budget in 2008-2009.

Grasser said this flexibility amounted to 2 billion euros over seven years.

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