EU leaders have reached an agreement on the budget for 2014-20 after marathon talks in Brussels.
The deal was announced by European Council President Herman Van Rompuy, who said it was "worth waiting for".
The new budget amounts to 908bn euros (£768bn; $1.2tn) in forecast payments. It is the first-ever reduction in the EU's multi-annual budget. UK Prime Minister David Cameron - who had been pressing for cuts - hailed it as a "good deal for Britain".
"I think the British public can be proud that we have cut the seven-year credit card limit for the EU for the first time ever," Mr Cameron said.
French President Francois Hollande - who had argued against big spending cuts - said it was a "good compromise".
The agreement came after almost 24 hours of negotiations, as countries such as France and Italy sought to protect spending.
The budget amounts to about 1% of the EU's overall GDP - it is dwarfed by the combined national budgets.
It must still be approved by the European Parliament, and MEPs had previously said they were prepared to block anything that amounted to an "austerity" budget.
Mr Van Rompuy said the deal amounted to a cut of roughly 34bn euro in both commitments and payments.
He said EU leaders had met their responsibilities by overcoming sharp differences, and he hoped the European Parliament would meet its responsibilities by passing the budget.
While Mr Cameron has claimed a significant overall cut as a victory the reality is that the UK's contribution is likely to go up, because the UK's rebate - currently about 3.5bn euros - is shrinking, under a previous agreement.
That was negotiated by former Prime Minister Tony Blair, to help fund the EU's eastward enlargement.
bbc.co.uk
The deal was announced by European Council President Herman Van Rompuy, who said it was "worth waiting for".
The new budget amounts to 908bn euros (£768bn; $1.2tn) in forecast payments. It is the first-ever reduction in the EU's multi-annual budget. UK Prime Minister David Cameron - who had been pressing for cuts - hailed it as a "good deal for Britain".
"I think the British public can be proud that we have cut the seven-year credit card limit for the EU for the first time ever," Mr Cameron said.
French President Francois Hollande - who had argued against big spending cuts - said it was a "good compromise".
The agreement came after almost 24 hours of negotiations, as countries such as France and Italy sought to protect spending.
The budget amounts to about 1% of the EU's overall GDP - it is dwarfed by the combined national budgets.
It must still be approved by the European Parliament, and MEPs had previously said they were prepared to block anything that amounted to an "austerity" budget.
Mr Van Rompuy said the deal amounted to a cut of roughly 34bn euro in both commitments and payments.
He said EU leaders had met their responsibilities by overcoming sharp differences, and he hoped the European Parliament would meet its responsibilities by passing the budget.
While Mr Cameron has claimed a significant overall cut as a victory the reality is that the UK's contribution is likely to go up, because the UK's rebate - currently about 3.5bn euros - is shrinking, under a previous agreement.
That was negotiated by former Prime Minister Tony Blair, to help fund the EU's eastward enlargement.
bbc.co.uk
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