EC Leaders Reach Accord on Funding

From Reuters

European Community leaders clinched a milestone accord early today to finance the EC into the 1990s and give it more muscle on the world stage.

The deal followed a retreat by British Prime Minister Margaret Thatcher when her insistence on drastic curbs on farm spending seemed certain to scuttle the 12-nation summit. She settled for softer penalties on Europe’s 10 million farmers if they produce too much in return for a tighter limit on overall EC spending.

The agreement, designed to last until the community removes all internal barriers in 1992, will boost funds from 44 billion European Currency Units ($53 billion) in 1988 to 53 billion ECUs ($64 billion) in 1992.

The accord will also restrict the share to be used for farm subsidies, up more than 20% last year, to less than 2% a year for the next three years.