Eastern Europe revolts against austerity on EU budget

(BRUSSELS) - Eleven of Europe's poorest nations defended a proposal to increase the 2013 EU budget on Tuesday, pitting them against richer states seeking to limit the bloc's joint spending.

The group, all former communist bloc countries except Portugal and Malta, issued a joint statement backing the European Commission's proposal to increase the budget by 6.8 percent to 138 billion euros ($176 billion).

The countries -- which include Bulgaria, Estonia, Lithuania, Latvia, Hungary, Poland, Romania, Slovakia -- are annual recipients of so-called EU cohesion funds aimed at helping poor regions modernise their infrastructures.

"We support this justified and strongly needed increase," the group said in a joint statement also signed by Croatia, which will become the EU's 28th member in 2013.

"Current economic circumstances demand difficult policy choices," they said in the statement presented at a meeting of EU finance ministers in Brussels.

"The EU efforts and scarce public resources should be focused primarily on growth and jobs. In this context cohesion policy has a key role to play for investing out of the crisis."

Their declaration was backed by Ireland, Greece, Italy, Belgium, Slovenia, and the Czech Republic, according to EU sources.

The draft budget calls for 48.9 billion euros in cohesion funding, an increase of 5.1 billion euros.

Any cuts in this area, the statement said, "would be artificial and not based on the real needs."

A group of wealthier nations, including Britain, France, Germany, Finland, Austria and the Netherlands, have opposed an increase in EU spending, arguing that Brussels should face the same austerity as national governments.

EU officials said they hope that France will change its position after Socialist Francois Hollande took power on Tuesday following his presidential election victory over right-winger Nicolas Sarkozy.