European leaders have agreed to the first budget reduction in EU history after overnight negotiations led by British Prime Minister David Cameron carved out spending cuts over the next seven years. The budget has agreed to be set at around €960bn, or £820bn, after 15 hours of tense negotiations amongst the various members, a cut of about €12bn from the previous proposal made in November. It also €30bn pull-back from the previous seven-year budget deal, making it the first real-terms cut in EU budget history.

EU Council President Herman Van Rompuy had said before the talks that the new budget needed to be for the future, with a clear focus on growth, innovation and creating jobs, whilst David Cameron had insisted that spending cuts needed to be implemented. He was supported by other northern nations such as The Netherlands, Denmark and Sweden in pushing the austerity measures, whilst France, Spain, Italy and the eastern bloc who wanted continued funding for agriculture and the poorest regions.

The talks, which went on for through the night, were too tiring for some observers. Leaders will continue negotiations later today as they seek to sign off of a final agreement for the deal, before it must be approved by the European Parliament that is likely to oppose any deep cuts.

Written and presented by Alfred Joyner