European Leaders Strike $1.3 Trillion Budget Deal For 2014-2020; Parliament Expected To Vote Next Week To Approve The Plan

European Union member states and the European Parliament struck a budget deal Thursday in Brussels after months of wrangling over the details of how to spend 960 billion euros ($1.3 trillion) between 2014 and 2020. The deal still has to be approved by the parliament, but it appears that major roadblock has been lifted.

Top priorities include bank rescue; agricultural reform; a 30 billion-euro fund to improve transport, energy and telecommunications; and a jobs program to tackle the nearly 25 percent unemployment rate facing young adults in some of the EU’s 27 member states.

“This is a good deal for Europe, this is a good deal for European citizens, this is a good deal for the European economy,” said European Commission President Jose Manuel Barroso following a meeting with Martin Schulz, European Parliament president, and Enda Kenny, Irish prime minster and current head of the European Council. “The deal includes more flexibility on both payments and commitments. The deal includes frontloading of expenditure on critical issues like youth employment, research, youth, namely Erasmus, and also SMEs [small and medium-sized enterprises].”

The budget was agreed upon in February, but the European Parliament refused to ratify it. Now it appears to be on its way to approval by the MEPs. Schulz confirmed via his Twitter feed the agreement to send the budget for a vote. An anonymous source told the BBC the vote could come as early as next week.

On Wednesday the European Commission laid out the draft 2014 budget of 278 billion euros, which is 6 percent lower than this year’s budget.

The budget allocates 30 billion euros to improve transport, energy and telecommunications infrastructure through the Connecting Europe Facility.

Germany, Europe’s economic powerhouse, has been taking a hard stance making bailouts contingent on structural reforms, including steep cuts to social entitlements and making it easier to fire workers, in the most troubled member states, like Spain and Italy.

Negotiations have also focused on reforms to the Common Agricultural Policy -- states that pitch in to the fund, especially the U.K., have complained that they disproportionately subsidize agricultural productivity to states that claim more of the cash, such as France. Reforms to agricultural policy include efforts to focus on smaller farming operations.

The deal also includes new “bail in” rules on rescuing Europe’s troubled banks that would force large depositors and shareholders to chip in to save their financial institutions before any taxpayer funds are used. It will also allocate an extra 10 billion euros from the European Investment Bank to lend to small and medium-sized businesses largely in the south, which has borne the brunt of the sovereign debt crisis that has pummeled Europe’s economy for years. Banks have been pulling back on lending to smaller businesses, which account for most employment.