BRUSSELS — As European Union leaders began their 14th hour of budget negotiations after a sleepless night, Valdis Dombrovskis, the prime minister of Latvia, took the floor early Friday to address what, for his Baltic nation of around just two million people, is a vital question: Why should a Latvian cow deserve less money than a French, Dutch and even Romanian one?
In a system that requires unanimous approval of budget decisions, what Latvia wants for its dairy farmers — or Estonia for its railways, Hungary for its poorer regions and Spain for its fishermen — is no small matter. It is this cacophony of local concerns that explains why, despite the outsize role in decision-making of Germany, the European Union has such trouble reaching an agreement on something as basic as a budget.
And if simply agreeing to a basic budget — the first decrease in its history — is so daunting to member countries, it also raised serious questions about the limits of political and economic integration that have long been the master plan for champions of European unity.
After a failed attempt to fix spending targets at the summit meeting in November and a 24-hour marathon of talks this week, European leaders finally agreed late Friday to a common budget for the next seven years. Slightly smaller than its predecessor, the new budget plan reflects the climate of austerity across a continent still struggling to emerge from a crippling debt crisis.
The colossal effort that was required to agree to a sum amounting to about €960 billion, or $1.28 trillion, or a mere 1 percent of the bloc’s gross domestic product, again exposed the stubborn attachment to national priorities that have made reaching agreements on how to save the euro so painful in recent years.
“We need to agree and to agree we need to take into account all countries,” said Mr. Dombrovskis in an interview. The Latvian leader, who rushed to his hotel for a shave, shower and change of shirt in the middle of the night, described the ordeal as “not a pleasant experience,” but said “it only happens every seven years so we can tolerate it.”
But toleration is not the same thing as cooperation.
“What we’re seeing is that European integration is very important to European leaders as long as it doesn’t imply that someone has to be paying for someone else,” said Daniel Gros, director for the Center for European Policy Studies, a research organization in Brussels.
“Sharing a European budget is not going to be the essence of the E.U., but crafting the rule books for open borders and stable banking systems will be,” said Mr. Gros.
For other observers, the spectacle of European leaders haggling through the night over amounts of money representing rounding errors in their national accounts once again demonstrated their reluctance to make policies together that erode their nations’ sovereignty.
“The budget negotiations are most visible sign of member states winning and losing from the European Union,” said Hugo Brady, a senior research fellow at the Center for European Reform, a research organization. “The result is a totally parochial budget that is poorly adapted to rapidly changing times,” he said.
The deal faces yet another hurdle before it becomes law at the European Parliament, which has the power to veto the budget.
Some of the most influential figures in Parliament have already signaled that they are prepared to reject a budget that foresees spending less on Europe in the years ahead.
Martin Schulz, the president of the Parliament, said this week he would not approve a budget that ended up widening the overall gap between the cash paid up-front by governments and the somewhat higher amounts, known as commitments, which make up the overall budget.
Britain, Sweden and the Netherlands were among the Northern European nations that fought hard to squeeze agricultural subsidies and increase spending on research and development to boost the bloc’s global competitiveness.
This article has been revised to reflect the following correction:
Correction: February 8, 2013
An earlier version of this article misspelled, on one reference, the last name of the Latvian prime minister. It is Dombrovskis, not Domobrovskis.
