Market Overview

New Eurozone Budget Bridges the Gap Between the North and South

New Eurozone Budget Bridges the Gap Between the North and South
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The euro traded steadily on Friday morning after falling on Thursday after European Central Bank President Mario Draghi closed the bank's policy meeting with comments suggesting he isn't expecting to see signs of recovery within the region until later in 2013.

On Friday morning, the euro traded at 1.3423 as eurozone leaders worked out a deal for the 2014-2020 budget.

At the eurozone summit, which began on Thursday, EU lawmakers worked through the night as they attempted to agree on a budget plan. According to Reuters, a eurozone official confirmed that the framework for the budget had been agreed upon; and although it hasn't been officially released, it is expected to be finished later on Friday.

The summit got off to a rocky start when French President Francois Hollande didn't attend a meeting with British Prime Minister David Cameron, German Chancellor Angela Merkel and European Council President Herman Van Rompuy. Hollande claimed he was never invited, but Cameron took the missed meeting as a snub which set the tone for icy negotiations between the two.

However, an agreement was reportedly reached, which combines northern European countries' belt-tightening budget ideas with southern European countries' demands for spending on farming and infrastructure.

The new plan will cut 12 billion euros from the last budget proposal, made in November. The majority of the savings came from cuts to cross-border transport, energy and telecom project funds. The new plan also targeted top EU officials' wages and perks, which contributed nearly 1 billion euros in savings.

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