EU lawmakers gave final approval on Wednesday for a European Union budget of nearly 133 billion euros ($172 billion) for 2013, removing some uncertainty around the bloc's future funding after talks on spending for 2014-2020 broke down. The vote by the European Parliament in Strasbourg brought some clarity to EU finances at least for next year, and saw off a threat that some EU programmes, including the Erasmus student exchange scheme, would run out of money this year.

"We have managed to avoid a budgetary crisis on top of the economic crisis," Goran Farm, a Swedish socialist member of the European Parliament, said in a statement. However, doubt still surrounds the EU's long term spending plans. EU leaders were unable to reach a compromise last month on a proposed budget of some 1 trillion euros between 2014-2020. Under the 2013 deal, EU payments next year will be limited to a maximum of 132.84 billion euros, which represents a just-above-inflation rise of 2.9 percent from the original budget agreed for this year. The vote will also unlock an extra 6 billion euros in spending for this year.

The 6 billion euros will fill a spending gap in research, education and employment programmes and means total EU spending in 2012 of 135 billion euros, the highest level ever. About three-quarters of the EU's annual budget is spent on farm subsidies and funding for new motorways, bridges and other public infrastructure projects in poorer eastern and southern European member countries. EU leaders will hold further talks, possibly in February, to try to agree on the bloc's long-term funding.

Copyright Reuters, 2012