EU leaders finally reached a seven-year budget accord Friday after marathon talks driven by sharp differences over the bloc's priorities for the rest of the decade.
"Deal done!" summit chair and EU President Herman Van Rompuy said on Twitter after more than 24 hours of tough talks between the bloc's 27 heads of state and government.
"Worth waiting for," he added, without giving details of the deal.
Pushed by British Prime Minister David Cameron, who said the EU could not decide an increase at a time of austerity, leaders were looking at a cut in spending of around three percent compared with the previous budget, according to a draft.
France, along with Italy, fought to protect spending it saw as essential to boost growth and jobs at a time of record unemployment.
A draft worked out overnight set 2014-20 actual spending or "payments" at 908.4 billion euros ($1.2 trillion), with an absolute ceiling of 960 billion euros for spending "commitments" to the budget.
That is just one percent of the bloc's gross domestic product.
It would represent a 3.0 percent cut from the 2007-13 budget and is less than the 973 billion euros Cameron and allies such as the Netherlands rejected at a budget summit in November that collapsed without a deal.
In the EU budget process, commitments refer to the maximum amount that can be allocated to programmes while actual spending or "payments" is usually lower as projects are delayed or dropped.
Originally, the European Commission had wanted a 5.0 percent increase in commitments to 1.04 trillion euros ($1.4 trillion) -- just over one percent of the EU's total gross domestic product.
The final leaders' agreement, however, is only part of the battle as there is another important hurdle to clear -- the European Parliament must approve and lawmakers are not in a mood for austerity.
Parliament head Martin Schulz said bluntly on Thursday that he and the assembly might not accept a budget which would compromise EU programmes and undercut its future.
However the accord spared key budget areas -- Common Agricultural Policy farm support payments and Cohesion Funds, a crucial source of money for new EU members seeking to catch up with their peers -- from any further reduction from the November figures.
France, a major CAP beneficiary, will likely claim credit for that just as Cameron may claim the bloc's first absolute spending cut for London.
Cameron, who last month risked isolating himself with a decision to hold a referendum on Britain's membership of the EU, insisted at the opening Thursday that the figures had to be cut.
"When we were last here in November, the numbers that were put forward were much too high. They need to come down -- and if they don't come down, there won't be a deal," Cameron said.
Hollande, meanwhile, said cuts in support for farmers and investment for growth would be his red lines but he may be able to argue that globally, he has managed to protect key areas of concern to Paris.