European leaders begin talks over budget cuts

European leaders started tough negotiations over a proposed 80 billion euros ($103 billion) budget cut from 2014 to 2020 in Brussels on Thursday, triggering strong opposition from some member states and even staff members at European institutions.

It is expected that the negotiations may last through the weekend to achieve consensus. European Council President Herman Van Rompuy said they must reach a deal to shake off the debt crisis.

European Union leaders leave after a family photo during an European Union leaders summit in Brussels Nov 23, 2012. (L-R) Germany's Chancellor Angela Merkel, European Commission President Jose Manuel Barroso, Latvia's Prime Minister Valdis Dombrovskis, France's President Francois Hollande, Netherlands' Prime Minister Mark Rutte and Britain's Prime Minister David Cameron. [Photo/Agencies]

The proposal has received strong opposition. Sources said trade unions under European institutions planned to arrange a strike against the budget cuts on Wednesday, but it was canceled. Some skipped work on Wednesday to protest administrative cuts by European institutions.

The proposed cuts focus on agricultural and cohesion expenditures, which are aimed at facilitating the integration process of poorer countries in middle and eastern Europe by using contributions from rich countries such as Germany, France and the UK.

Just one week ago, around 40 groups from 23 countries in the EU staged walkouts and strikes against rising unemployment and austerity measures.

The protests in Spain, Greece, Portugal and Italy caused travel chaos in the UK as airlines canceled a number of flights to Spain and Portugal.

Protests have also taken place in Belgium, Germany, France and some eastern EU states.

Despite the opposition, Van Rompuy said he is determined to reach a deal.

"Let there be no mistake: The absence of an agreement would be harmful for all of us," he said. "This is why I have made arrangements so that our meeting can be prolonged, if necessary.

Eulalia Rubio, a research fellow at Notre Europe-Jacques Delors Institute, the European think tank founded by Jacques Delors, said European budget has a small impact on the EU economy as a whole because it represents just 1 percent of EU GDP and accounts for around 2 percent of total public spending in Europe.

"However, it can have a significant effect on particular territories," said Rubio, adding that the European budget is the maximum expression of solidarity between richer and poorer EU countries because it devotes more than 30 percent of its resources to finance the so-called "cohesion policy", which aims to help poorer regions and countries catch up.

Benedicta Marzinotto, a research fellow at Bruegel, a European think tank specializing in economics, said both Germany and France support small cuts in the EU budget, but they don’t go as far as the UK, which is suggesting much deeper cuts.

"It is important that the 2014-20 budget plan is agreed in time for the EU to start spending, especially on medium- to long-term investment projects. Already in 2014 any delay in the approval of the budget package would delay investment in Europe," Marzinotto said.

Liu Jia contributed to this story.