European leaders have agreed on a significantly pared-back 960 billion euro (1.3 trillion dollars) seven-year budget for 2014 to 2020.
EU President Herman Van Rompuy on February 8 said that the "compromise shows a sense of collective responsibility from European leaders."
But he added that a final agreement must still be reached with the European Parliament.
"It's perhaps nobody's perfect budget but there is a lot in it for everybody. Obviously, you can look at the end result through many, many prisms. From the overall European perspective, I want to emphasize that this budget is future-oriented, it is realistic, and it is driven by pressing concerns," Van Rompuy said.
Rompuy called the compromise a budget of moderation." He said that the leadership summit could not ignore the "extremely difficult economic realities across Europe."
He added that for the first time ever, the EU budget has been cut.
"We agreed, it will be a cut of roughly 34 [billion euros] for both commitment and payment compared to the period 2007-2013, resulting in the overall ceilings of 959 [billion euros] in commitments and 908 [billion euros] in payments," Van Rompuy said.
"It means a cap in commitments at exactly 1 percent of total European GNI [Gross National Income]. A sensible and nicely round number."
European Commission President Jose Manuel Barroso said that despite his disappointment with the deal, he could understand its logic.
He said that deal reflected the highest possible level of agreement among the EU leaders.
"This has been a difficult negotiation. But a fair assessment should recognize that this deal is not perfect but it offers a basis for negotiations with the European Parliament. I hope that these negotiations will be successful," Barroso said.
The agreement will now go to the European Parliament for final approval, a process that could take several months.
Already the heads of its biggest legislative groups have warned that they would not accept the deal as it stands.
In a statement February 8, the leaders of the conservative, socialist, liberal, and green factions warned, "This agreement will not strengthen the competitiveness of the European economy, but weaken it. It is not in the prime interest of our European citizens."
European Union leaders reached the agreement on the bloc's long-term spending plans after more than 24 hours of negotiations in Brussels.