BRUSSELS, Dec. 17 (Xinhuanet) -- Leaders of the European Union (EU) had reached an agreement on the bloc's 2007-2013 budget, British Prime Minister Tony Blair announced here early Saturday morning.

British PM Tony Blair (C) speaks next to the President of the European Commission Jose Manuel Barroso (R), and British Foreign Secretary Jack Straw at the end of EU summit in Brussels Dec. 16. (Retuers)

    "You probably know that we have reached an agreement on the financial perspective," Blair, whose country holds the EU's rotating presidency, told reporters after the deal was sealed.

    The deal came after Britain agreed to cut its rebate by 10.5 billion euros (12.57 billion US dollars) over seven years and proposed a 2007-2013 budget of 862.3 billion euros (1.04 trillion dollars), or 1.045 percent of EU output, up from 1.03 percent in an earlier proposal.

    However, EU leaders also agreed to order the European Commission to publish in 2008/09 "a full, fundamental review of all aspects of EU expenditure" including farm subsidies and the British rebate, according to Blair.

European Union's foreign policy chief Javier Solana (R) sits on the conference table while talking to Italian PM Silvio Berlusconi during EU summit in Brussels Dec. 16. (Reuters)

    The EU summit struck the deal after EU leaders conducted a marathon negotiation that had dragged into the third day.

    Defending the cut of Britain's rebate, Blair said "we just pay our share for the cost of the EU enlargement."

    "The deal allows us to move forward the solidarity of the European Union," said Blair, adding that the "difficult compromise" had removed the major obstacle and cleared the way for the European integration.

    Compared to the earlier proposal, the deal increases over 5 billion cohesion funds to the new EU member states and will help them boost economic development.

    According to the EU's rule, the deal has to be tabled to the European Parliament for approval. Enditem