THE EUROPEAN UNION has agreed to a 1.86 per cent rise in its budget for the coming year, bringing the overall pot to €129 billion.

The latest negotiations on next year’s budget lasted for over 15 hours, continuing through last night before an agreement was reached early this morning.

However, while a 1.85 per cent budget increase on 2011 was approved, so too were spending commitments of €147 billion.

EU Budget Commissioner Janusz Lewandowski warned that given the demand on EU funding there is a “serious risk” that the Commission will run out of money during 2012.

Lewandowski, who had pushed for a 5 per cent increase in payments to the budget, said he regretted that the Council and European Parliament “did not take into account the fact that, as we are reaching the end of the current financial period, EU-funded projects across Europe gather speed, and that therefore the European Commission has to pay higher amounts to beneficiaries than at the beginning of the financial period”.

Discussing the figures today, Lewandowski said it was “clearly an austerity budget as most member states are in the midst of a serious financial crisis”.

Data from the European Parliament shows that Ireland received €2.065bn in EU funding last year (over three-quarters of which was spent on agriculture), while the state contributed €1.208bn to the EU in 2010.