US Debt Default: US could learn from the Netherlands says EU’s Rehn

Squabbling U.S. politicians could learn from the Netherlands, where the government has just struck a "very significant" budget agreement, Olli Rehn, the vice-president of the European Commission, told CNBC on Monday.

After two weeks of wrangling, the Dutch government struck a deal on Friday that included 6 billion euros ($8.1 billion) in budget cuts in 2014, despite opposition from three political parties, and the lack of a majority in one house of the legislature.

In an exclusive interview with CNBC, Rehn praised the Netherlands' pact as a triumph of "responsibility over brinkmanship" and hinted that the U.S. could do likewise.

Read more: US could learn from the Netherlands: EU’s Rehn

EU set to agree 2013 budget after Commission climb-down

EU politicians are expected to avoid becoming the first to fail to agree the bloc's annual budget since 1987 after brokering a last minute deal.

MEPs tentatively accepted a commission proposal that would increase the EU's spending in 2013 from €129 billion to €132.8 billion on Tuesday (4 December).

The deal was agreed by negotiating teams from the three EU institutions last Friday (30 November) with the details only revealed on Tuesday. Parliament's three main political groups: the centre-right European People's Party, the Socialists, and the Liberals, are all likely to back the deal.

Under the proposal, the commission's demand for an additional €9 billion to cover unpaid bills for 2012 has been reduced to €6.1 billion. The money is needed to fill a funding gap for flagship EU projects including the Erasmus scheme, which funds student exchange programmes, as well as the European social fund, which assists workers who have recently been made redundant.

The 2013 annual budget will rise by 2.9 percent to €132.8 billion, higher than the freeze demanded by national governments, but well below the €138 billion requested by MEPs and the commission.

However, senior parliament sources said that the extra €6.1 billion would only cover payments for the first ten months of 2012, meaning that unpaid bills from November and December would be carried over into next year.

Read more: EUobserver.com / Headline News / EU set to agree 2013 budget after Commission climb-down