MEPs have approved the first-ever cut to the EU’s seven-year spending cycle in the bloc’s history.
The European Parliament voted for the 960 billion euros earmarked for the period 2014 to 2020.
British Prime Minister David Cameron opposed the higher figure of the one trillion euros demanded by the European Commission.
The approval follows over two years of terse political negotiations between governments and EU institutions.
The head of the parliament, Martin Schulz, had threatened to block the budget before backing down.
“For nine months, everyone made a lot of noise. Mr Schulz made a lot of noise. He kept on making noise. Then something got a hold of him and that was that. Parliament did not exist,” sad French Green MEP Daniel Cohn-Bendit.
Alain Lamassoure, a centre-right member from France, said that this deal was not enough to support the EU’s spending and commitments.
“This budget framework solves nothing. It was not the best or the least bad. It was the only possible. It will not last seven years. Not even three years. This framework does not ensure the minimum level of solidarity between Member States,” he told lawmakers.
Some two-thirds of this budget will be spent on regional aid and agricultural subsidies. But there will be a review in 2016 by EU leaders.