The draft budget totals 132.7 billion euros in payments from member states.

The commission said the increase was necessary because the EU needed more money to pay for programs launched in 2007 that were now running at full speed.

In 2012, the EU has to reimburse regional authorities or small and medium sized enterprises that have invested in those programs. Payments for the EU-funded research programs and for the structural and cohesion funds would also increase.

Meanwhile, the commission proposed to keep a freeze on its administrative expenditure for 2012 at a time when EU member states are making painful cuts to their spending.

"The draft budget 2012 endeavors to be in tune with the current austerity climate at national level," the commission said. "This has been achieved by significantly reducing expenditure linked to buildings, information and communication technology, studies, publications, missions, conferences and meetings."

The draft budget foresees some 57.7 billion euros for sustainable growth to help member states increase their investments in these areas whereas some 62.6 billion euros is dedicated to the Europe 2020 priorities, an increase of 5.1 percent on the previous year.

Lewandowski described the draft budget as "a delicate balancing act combining austerity and growth-boosting measures for 500 million Europeans", adding the key objective was to fully support the European economy and EU citizens.

The draft budget must be approved by EU governments and the European Parliament.

Last year, there was a fierce battle over the EU's 2011 budget. Britain and several big member states strongly opposed the 6 percent increase initially proposed by the commission. The final deal saw an increase of only 2.91 percent for 2011.