Leaders of 27 European Union member states were all smiles in Portugal's capital Lisbon yesterday as they signed the EU's milestone Reform Treaty, which replaced the now-defunct European Constitution that fell through when it was shot down by French and Dutch voters in 2005.

Prime Minister Lawrence Gonzi expressed satisfaction that EU leaders, after seven long years, managed to reach this agreement on the future of the European Union.

It was positive that the agreement was reached on the occasion of the European Union's 50th birthday. It was a treaty through which the EU can continue working in everyone's best interest. All that is left is the ratification process. When asked, Dr Gonzi said he hoped the treaty will be presented to Parliament next year.

The signing ceremony was held in the central courtyard of the Mosteiro dos Jeronimos, a 16th century monastery. Malta, represented by Dr Gonzi and Foreign Minister Michael Frendo, was the 17th member state to sign the treaty as countries were called in alphabetical order.

Among other things, the treaty will give Malta a sixth seat in the European Parliament. Many countries - 17 of the 27 - lost seats and the number of European parliamentarians will fall from the present 785 to 751 at the next MEP elections in June 2009.

As a result of the treaty, the European Commission will have fewer commissioners in order to function better. Contrary to the situation now, not every member state will have a commissioner but, as from 2014, the number of commissioners will drop from 27 to 17.

They will be appointed for five years and will rotate among member states.

The treaty includes a reference to the charter of fundamental rights that contains an exhaustive list of well-established rights, such as freedom of speech and religion. It also includes the right to shelter, education, collective labour bargaining and fair working conditions. It will be legally binding for 25 of the 27 EU members because Britain and Poland insisted on and obtained opt-outs.

The EU will have a president for two-and-a-half-year terms and a more powerful foreign policy chief who answers to the EU governments but is a member of the European Commission, the EU's executive arm. The foreign policy chief will have control over the EU's aid budget and its extensive network of diplomats and civil servants.

The Reform Treaty will also introduce a new voting system, also as from 2014 when a decision can only be made if it has the backing of 55 per cent of the EU states representing more than 65 per cent of the bloc's population, which now stands at 490 million. The treaty will mean the EU can take decisions by majority rather than unanimous voting in 50 new areas including judicial and police cooperation, education and economic policy. Britain and Ireland obtained opt outs in judicial and police areas.

However, unanimity is still required in foreign and defence policy, social security, taxation and culture affairs. National parliaments get more oversight powers over EU legislation.

Moreover, if anyone manages to get a million signatures on a petition asking for EU law in a specific area, the European Commission must draft such legislation.

The Reform Treaty, although signed by EU leaders, will now have to be accepted in each member state. In Malta, like in most other member states, the treaty will be ratified by a resolution in Parliament. So far only Ireland has said it will hold a referendum on the new treaty. Denmark, which until a few days was still unsure, has now declared there will not be a referendum.

Ratification must be made by the beginning of 2009 - when the treaty should come into force. Portuguese Prime Minister José Socrates, said the treaty was another positive step in the European project.

History will regard yesterday as a day when new paths of hope were opened to the European ideal.

With the Treaty of Lisbon, Mr Socrates said, Europe finally overcame the political and institutional impasse that limited its capacity to act over the last few years.

"The European project is a project founded on the equality among states, mutual respect, close cooperation and tolerance.

The European project does not eliminate or minimise national identities or the states' specific interests. On the other hand, it offers a multilateral framework of regulation from which benefits can be drawn for the whole and for each of the parts that participate in the project. This treaty is a new moment in the European adventure and of the European future. And we face this future with the same spirit we always had, certain of our values, confident in our project, strengthened in our Union," Mr Socrates said.

European Commission President José Manuel Barroso said all member states showed political courage in reaching an agreement on the treaty and he appealed to the states to now use the same determination and political will in the ratification process.

He said the treaty will help the Union deliver better results to EU citizens by giving more competence to the European Parliament. It will give more legal protection to citizens, thereby reinforcing European values. It is the treaty of an enlarged Europe, a Europe that shares common values and ambitions, united in support of a common treaty, he said.

In his speech, delivered in three languages - Portuguese, English and French - Mr Barroso called on European leaders to use the treaty to make freedom, prosperity and solidarity a reality for all Europeans.

European Parliament president Hans-Gert Pottering said that at the beginning of this year talk was rife about an insurmountable crisis for the European Union but now the EU is emerging from this crisis stronger than before. The treaty made the Charter of Fundamental Rights legally binding in member states. National parliaments will have stronger rights through the reform treaty signed yesterday and that good cooperation between the European Parliament and national parliaments is especially significant, he said.

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