EU reaches political deal on 2014-2020 budget

European Commission President Jose Manuel Barroso on Thursday announced a political deal on the EU's hotly contested 2014-2020 trillion-euro budget.

Barroso said a deal had been reached at emergency talks between the Commission, which is the EU executive, the European Parliament leadership, and Ireland, which currently holds the rotating EU presidency.

But the accord on the budget, which has been disputed for months, must still be formally approved by parliament's 754 lawmakers.

Barroso had called high-level breakfast talks in hopes of unlocking the European Union's next seven-year budget just hours before the bloc's 27 heads of state and government gather for a two-day summit.

"Today we have agreed on this budget that will make investment in Europe possible," Barroso said. "This is the growth fund for Europe."

The top item on the summit agenda is to agree quick spending on jobs and training for the 5.6 million under 25-year-olds currently unemployed across the EU, victims of the years of tough austerity policies enforced to beat Europe's debt crisis.

Welcoming the morning breakthrough, Prime Minister Enda Kenny said: "What we have to do now is see that these monies are channelled into effective programmes so people across the EU can find jobs."