EU budget increase for 2012 limited to 1.86 per cent

Brussels (dpa) - The European Union‘s budget is to increase by 1.86 per cent next year, the European Parliament agreed Thursday, giving the final seal of approval to the bloc‘s 2012 spending plans, a day after EU finance ministers gave their consent.

The EU‘s executive, the European Commission, had first proposed an increase of around 5 per cent. The EU assembly suggested a similar figure, but the increase was slimmed down on the insistence of austerity-focused EU governments.

The EU will thus be able to spend 129.1 billion euros (174.2 billion dollars) next year, but EU Budget Commissioner Janusz Lewandowski predicted that it will not be enough.

"There is now a serious risk that the European Commission will run out of funds in the course of next year," he said in a statement.

EU governments have agreed with lawmakers to amend the budget in the course of next year if money does indeed run short. As part of the 2012 deal, the two sides also added 200 million euros to the 2011 budget, 150 million less than the EU commission was asking for.

Last year, a much fiercer confrontation erupted over the size of the 2011 budget. Lawmakers accepted the 2.9-per-cent increase suggested by EU states, after initially pushing for a 6-per-cent increase. dpa alv mat Author: Alvise Armellini