EU leaders have reached an agreement on the budget for 2014-20 after lengthy talks in Brussels.
European Council President Herman Van Rompuy announced the deal and said in a statement it was "worth working for".
The new budget ceiling amounts to 960bn euros (£812bn; $1.3tn). It is the first time the EU's multi-annual budget has been reduced.
UK Prime Minister David Cameron, who had been pressing for cuts, hailed it as a "good deal for Britain".
"I think the British public can be proud that we have cut the seven-year credit card limit for the EU for the first time ever," Mr Cameron said.
French President Francois Hollande, who had argued against big spending cuts, said it was a "good compromise".
German Chancellor Angela Merkel also welcomed the deal, which represents a 3.3% reduction from the previous seven-year budget.
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