French President Jacques Chirac urged the European Union (EU) to embrace institutional reforms on Saturday, shortly after an EU summit agreed on the bloc's 2007-2013 budget plan.

"Our institutions are not really adapted today to a wider and modern Europe," Chirac said after returning from Brussels where the EU's spending accord was endorsed only after Britain agreed to cut its rebate by 10.5 billion euros (12.57 billion US dollars) over seven years.

"Now, we must move on to the next phase," said Chirac.

The French president said EU institutions should be more democratic and more effective, adding that France plans to make "ambitious proposals for the Europe of tomorrow" during the Austrian presidency of the bloc that starts in January.

Chirac also expressed his appreciation for British Prime Minister Tony Blair's "courage," "initiative" and "responsibility" in making concessions that made the budget deal possible.

Britain had originally proposed to cut the budget to 846.8 billion euros (993.9 billion dollars), down from 871 billion proposed by previous presidency Luxembourg.

The proposals drew widespread criticism from EU countries, especially new members, as most of the savings would come from slashing aid to the newcomers and cutting rural development funds for western Europe.

Source: Xinhua