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EU remains divided over budget

The leaders of the European Union are battling over proposals for the EU’s 2014-2020 budget with Britain leading the call for a cut. Divisions have been growing between the rich and poor nations of the region with German Angela Merkel ruling out a deal until the New Year.

The French defended their farming subsidies, the Danes demanded their own rebate and Britain stuck to its guns over its own. Countries from the struggling ‘piigs’ nations argued that a reduction of the budget would harm the financing of public-works and would condemn their respective country’s to lag behind the wealthier ones, even though those regions have been hammered by austerity because of their over spending in the first place.

“Positions remain too far apart,” Merkel told reporters early today after the first session of a summit in Brussels. “Probably there will be no result at the end of this summit. There may be some progress but it is probable that we will need to meet again at a second stage.”

The stalemate had caused the Euro to weaken by half a cent against the US Dollar as investor demonstrated their exasperation over the squabbling. This latest round of bickering follows the twelve hour long argument over how to proceed with the Greek situation. One thing the EU is proving exceptionally good at is procrastination especially at a time when action is what is needed.

Britain targeted aspects of the budget that it deemed unnecessary including the €50billion program for transport, energy and broadband known as the ‘Connecting Europe facility’. France also wanted to slash the program as it attempted to ditch the program in an effort to save its agriculture budget. Britain’s rebate demands and France’s defense of farming gave the talks the flavour of EU negotiations in the 1970s or 1980s, belying pledges to equip Europe with a budget to make it more competitive in the face of emerging powers like China.

The majority of the budget is thought to be set said for construction projects for the Eastern European countries in an attempt to improve their transportation and communication links whereas over a third is set aside to go to agriculture. Greece, Spain, Italy, Ireland and Poland are all championing the farming budget.

Smaller parts of the budget go for programs on immigration and border control, foreign policy and development aid, and salaries for the more 50,000 employees of institutions including the commission, European Parliament and bodies ranging from the European Chemicals Agency in Helsinki to the European Fisheries Control Agency in Vigo, Spain.

As is becoming the norm we are going to have to wait another few weeks before we get any firm results from the talks. The wait goes on.

The Pound to Euro exchange rate is currently trading at 1.2354

The Pound to US Dollar exchange rate is currently trading at 1.5930

The Pound to Australian Dollar exchange rate is currently trading at 1.5322

The Euro to US Dollar exchange rate is currently trading at 1.2895

The Euro to Pound exchange rate is currently trading at 0.8093

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