A deal to modernise Europe

EU leaders reached a deal on the new Treaty of Lisbon early on Friday morning (19 October) after eight hours of tortuous negotiations had resolved problems raised by Italy and Poland.

Portuguese Prime Minister José Socrates said that the result was a "victory for Europe" which would put an end to the "institutional crisis". European Commission President José Manuel Barroso said that the agreement would "allow Europe to defend its interests in the age of globalisation".

EU leaders set a target date for the new treaty to come into force of January 2009 provided it receives approval by national parliaments or in referenda in time. But one of the new treaty’s main changes, a move to a new system of voting in the Council of Ministers, the double majority, will not take effect until 2014.

Despite initial fears that a deal on the treaty might be blocked by the Polish president or the Italian prime minister, the summit managed to address their concerns. Lech Kaczynski, the Polish president, said after the summit: "Poland got what it wanted."

His colleagues backed Kaczynski’s request to allow a small group of countries to delay EU decisions even though they do not have the number of votes necessary to block them, the so-called Ioannina compromise. Poland also won the right to appoint an advocate-general, or legal adviser, at the European Court of Justice.

Following Romano Prodi’s threat to veto the deal unless Italy was given the same number of members of European Parliament as France and the UK, Italy received one more MEP. The overall number of MEPs was increased to 751 - or, to respect the leaders’ initial pledge on capping the number of MEPs, 750 plus the president.

EU leaders arrived at the summit on Thursday evening with two potential stumbling blocks already settled. Barroso had promised Austrian Chancellor Alfred Gusenbauer that the Commission would suspend for five years a court challenge against Austria’s attempts to impose a quota on the number of foreign students at its universities. Austria’s higher education institutes, especially medical schools, have been hit by an influx of German students. But under EU rules, quotas on foreign students are illegal. The Commission and the Austrian government will work to find a solution.

The Bulgarian government also won guarantees before the summit that it would be allowed to use the Cyrillic language spelling of the euro despite the European Central Bank’s insistence that all EU countries should spell the name of the currency the same way.

But ratification of the treaty in all 27 member states may still be a big stumbling block.

French President Nicolas Sarkozy said that he would try to get the new treaty ratified through parliament in December even though it will formally be signed off by EU leaders only on 13 December. He said he hoped that France, whose citizens voted in May 2005 against the EU constitution, which the Lisbon treaty seeks to replace, would be the first to ratify the new treaty.

UK Prime Minister Gordon Brown said that he hoped the UK parliament would ratify the treaty within three months. But Brown is increasingly coming under pressure to organise a referendum on the new treaty, as his predecessor, Tony Blair, had promised to organise a popular vote on the EU constitution. At this stage, only Ireland, which needs to submit all new treaties to a popular vote, has announced that it will hold a referendum on the treaty, in May or June next year.

The Danish government will decide whether a referendum is needed based on a judicial review by the justice minister on whether the new treaty transfers national sovereignty to the EU. If this review, which will probably take place in December, decides that there is a transfer of sovereignty, the new treaty has to be approved by five-sixths of MPs or by referendum.

In a separate move, there is political support, including from the leader of the opposition Social Democrats Helle Thorning-Schmidt, for a referendum ending Denmark’s four opt-outs which the country obtained after Danish voters rejected the Maastricht treaty in 1992. The four opt-outs apply to the euro, defence, justice and home affairs and EU citizenship. In the area of justice and home affairs (JHA) Denmark has to negotiate a separate treaty requiring ratification to take part in JHA initiatives when third pillar instruments move to the first pillar.

There was a broad consensus among EU leaders that the new treaty would put an end to the need for further institutional reform in the near future as well as resolving the divisions thrown up by the rejection of the constitution. Leaders said in Lisbon that there should be no new institutional reform for at least ten years. Socrates said that he was confident the Lisbon treaty would have a very long "life expectancy". Brown said that the EU "ruled out further institutional change for years ahead".

Kaczynski agreed, saying: "We now need ten years to see how the institutions are functioning before occupying ourselves with future reforms."

The deal

• Revised Ioannina compromise

From 2014, if there are enough member states to form 75% of a blocking minority, they can require the Council of Mininsters to delay a vote and find broader support for a decision. But a decision must be taken "within reasonable time" ­keeping to the usual time limits for EU law-making - a reference to the three-month deadline for each stage of the co-decision process. In addition, according to the Council’s rules of procedure, any member state can at any point request a vote to be taken.

Poland wanted the Ioannina compromise written into primary law, either in the treaty text or in a protocol, which has legal value, but not in a declaration, which does not have the same legal force.

Under the final agreement, the Council will adopt as soon as December, or more than a year before the treaty is expected to enter into force, a decision giving the Ioannina compromise legal force.

To reassure Poland that the measure could not easily be reversed, a protocol to the treaty states that rescinding the decision requires consensus in the European Council. But this is a lighter procedure to change the Ioannina clause than requiring a new intergovernmental conference, with fresh ratification in all member states, as the Poles wanted when they insisted that it be included in the treaty text.

One EU official said that the deal meant that the revised Ioannina compromise would be available but could be deleted several years down the line when governments had grown used to the new voting rules, the double majority, in the Lisbon treaty.

• Advocates-general

The summit also agreed to increase the number of advocates-general at the European Court of Justice by three to 11. Poland joins the group of five large EU states which always appoint an advocate-general, while the two other new advocates-general would rotate every five years among other countries. Sarkozy said that it was "normal" that a country with a population of 40 million had a permanent advocate-general.

• MEPs

After Romano Prodi said that he could not accept the European Parliament’s approach for allocating seats because it would have left Italy with 72 MEPs, one fewer than the UK and two fewer than France, government leaders agreed to give Italy one more MEP and to increase the number of members to 751 - 750 plus the president, who is elected for two and a half years. This agreement will only be formalised in December because Poland did not want to draw attention, ahead of Sunday’s (21 October) election, to the fact that it will gain only one MEP under the new allocation, fearing it would be under pressure to demand more.

• Taking back powers

At the request of the Czech Republic, which insisted that EU integration was not a one-way street and that it should be possible to give powers back to the member states, a declaration was attached to the treaty which says that the Council can ask the Commission to present proposals to remove legislation.

• Nomination of high representative

Government leaders agreed to hold "appropriate contacts" with the European Parliament during preparations for the new High Representative for Foreign Affairs to start his or her term of office on 1 January 2009.

MEPs are insisting that the new figure, who will be at the same time a vice-president of the Commission, should undergo a hearing and be formally approved by Parliament. Sarkozy is keen to have the appointments for the new posts of high representative and president of the European Council sorted out during the French presidency of the EU, in the second half of 2008, so they can take up office in January 2009.

• Charter of Fundamental Rights

The charter will be solemnly proclaimed by the heads of the three EU institutions and published in the Official Journal. It will be legally binding and used for the interpretation and implementation of EU laws.

French President Nicolas Sarkozy announced at the close of the summit that he wanted France to be the first country to ratify the new treaty, claiming that it could be approved by the French parliament in December this year.

The UK hopes to have the treaty approved by March or April next year. But UK Prime Minister Gordon Brown is under increasing pressure to hold a referendum, with the opposition Conservative MPs calling on him to put the new treaty to a popular vote. The Labour government has a majority of 69 in the House of Commons and while some Labour backbenchers might refuse to support the treaty and demand a referendum there are not expected to be enough to overturn the government’s majority. Some pro-EU Tories may also vote with the government and against their party leader. The two leading candidates for leadership of the Liberal Democrats, the third biggest party, have also said that they oppose holding a referendum although some of the party’s politicians support a popular vote.

Debate about organising a referendum on the new treaty has also revived in Portugal, where the government was planning to consult voters on the EU constitution.

In the Netherlands, where voters rejected the constitution in June 2005, the government is also planning to have the new treaty ratified quickly through parliament.

Denmark, where voters rejected the Maastricht treaty in 1992, will probably not hold a referendum as the government maintains that the new treaty does not involve a transfer of sovereignty to the EU.

That leaves Ireland as the only country to have a referendum. This will probably be in May next year but may be later if the government decides to combine it with other public consultations.

EU leaders reached a deal on the new Treaty of Lisbon early on Friday morning (19 October) after eight hours of tortuous negotiations had resolved problems raised by Italy and Poland.