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O 191556Z OCT 07
FM AMEMBASSY LISBON
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6365
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE IMMEDIATE

UNCLAS SECTION 01 OF 03 LISBON 002680 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL EUN
SUBJECT: EU LEADERS CLINCH LANDMARK DEAL ON "LISBON TREATY" 
 
 
LISBON 00002680  001.3 OF 003 
 
 
(This message was prepared by USEU, coordinated with Embassy 
Lisbon) 
 
SUMMARY 
------- 
 
¶1.  EU leaders, at their informal Summit meeting in Lisbon 
October 18-19, reached an overall agreement on the new EU 
Treaty that will be signed in Lisbon on December 13.  The 
deal was clinched after the Portuguese Presidency managed 
to overcome outstanding reservations by Italy and Poland 
on two specific issues.  Italian PM Prodi obtained an 
extra seat in the European Parliament in a gesture from 
colleagues aimed at easing his concerns that Italy would 
emerge with fewer MEPs than other EU big states post-2009. 
The Portuguese also found a formula unblocking the Polish 
stalemate on voting rights in the EU Council.  The treaty 
deal, hailed as "historic" by Commission President 
Barroso, puts an end to six years of inward-looking 
debate by the Union about institutional reforms.  It 
immediately enabled the leaders, who claimed they are 
now in a position to address the real concerns of 
their citizens, to turn their attention to the challenges 
of globalization.  USEU will follow up with a detailed 
analysis of the new treaty in the weeks ahead.  END SUMMARY. 
 
"A VICTORY FOR EUROPE" 
---------------------- 
 
¶2.  EU leaders in the early hours of October 19 sealed 
their agreement on the text of a new treaty seen as 
essential for the EU to streamline its 
institutional and decision-making mechanisms and to 
enhance its ability to act on the international scene. 
A delighted Portuguese PM Socrates said the leaders 
would formally sign what will become the "Treaty of 
Lisbon" in the Portuguese capital on December 13 
(only five days after the EU-Africa Summit), right 
before heading to Brussels to meet in their regular, 
formal European Council meeting.  The signing 
will open the way for ratification of the new 
treaty by the EU-27, a process to be conducted 
by the individual Member States in accordance with 
their own modalities.  Only Ireland is expected 
to hold a referendum at this point. 
 
¶3.  Bound to enter into force in 2009 (exact 
timing will depend on pace of ratification 
process), the "Treaty of Lisbon" will complement 
and amend its predecessors, rather than replace 
them as the draft Constitutional Treaty rejected 
by the French and Dutch voters in 2005 was 
supposed to do.  Among the major innovations 
is the creation of the job of permanent President of 
the European Council, to be elected by EU 
leaders for a two-and-a-half-year term (renewable 
once).  The jobholder will prepare EU summit 
meetings and be the chief interlocutor with the 
U.S. President, including at our bilateral 
Summits.  Another change of special interest 
to the USG will be the merging of the current 
functions of the High Representative for CFSP (Solana) 
with those of the RELEX Commissioner 
(Ferrero-Waldner) in the "High Representative 
of the Union for Foreign Affairs and Security 
Policy."  The post-holder will also be 
a Vice-President of Commission, which should 
ease coordination of EU external actions. 
Commission President Barroso said the leaders 
assured the European Parliament it would have 
a say in the nomination of the High Representative 
if appointment took place before the installation of a new 
Commission at the end of 2009. 
 
¶4.  "With this agreement Europe has emerged from its 
institutional crisis," PM Socrates told a joint 
press conference with Barroso in the early hours 
of October 19.  Socrates and Portuguese compatriot Barroso 
openly displayed their cooperation, praising each 
other in joint celebration of a major success 
for their country and its capital.  Socrates hailed 
a "victory for Europe," saying the EU was 
"coming out stronger" from its six years of 
negotiations on institutional issues with the 
ability to "play its full role" in the world. 
Barroso opined: "In this case, we're really talking 
about a historic agreement, which really gives the 
European Union a capacity to act and to turn to 
issues most important to its citizens."  As an 
illustration, the leaders turned their attention to 
the EU's role in facing the challenges of 
globalization at a two-hour working session on 
the morning of October 19. 
 
¶5.  Though the Portuguese Presidency was credited 
 
LISBON 00002680  002.3 OF 003 
 
 
for its skillful handling of the treaty reform 
negotiations, rumor in the press room had it that 
French President Sarkozy and veteran EU summiteer, 
Luxembourg PM Juncker, also worked behind the 
scenes to address Polish and Italian concerns. 
 
ONE MORE MEP FOR ITALY 
---------------------- 
 
¶6.  Italy had voiced strong opposition over the 
past few weeks to the proposed reallocation of 
seats in the European Parliament.  The leaders 
had agreed last June to a revised treaty 
provision setting the total of MEPs at 750 
(from the current 785) after the next direct 
election in June 2009.  The EP itself worked 
on the country-by-country breakout, roughly 
based on population sizes.  PM Prodi, under 
pressure from his domestic opposition, resisted 
the formula, under which Italy would lose the 
parity in EP seats it currently enjoys with 
France and the UK.  Under the EP proposal, 
the three countries would all lose seats 
post-2009, with France going from 78 seats 
to 74, the UK from 78 to 73, and Italy from 78 to 72.  The 
leaders eventually agreed to increase by one 
the total number of MEPs from 750 (in creative 
arithmetics, taking the EP President out of 
this total), thus making it possible to 
allocate an extra seat to Italy.  PM Socrates 
said the leaders would take a formal decision 
on the detailed allocation of seats at their 
next meeting in December 2007. 
 
TAKING CARE OF POLAND 
--------------------- 
 
¶7.  The new treaty will over time (not before 2014-2017) 
replace the current system of weighted voting in the 
Council by a simpler requirement for a "double 
majority" (55 percent of countries, corresponding to 
65 percent of the total EU population) that will 
have the effect of reducing Poland's weight in 
the approval of (mostly economic) legislation tabled by the 
Commission. Anxious to appear as the 
staunchest defenders of national interests on the eve of 
Polish elections, the Kaczynski brothers had called for 
the new treaty to enhance the legal status of the so-called 
"Ioannina compromise," a complex mechanism that allows 
outvoted EU governments to request further 
deliberations of the draft legislation they 
dislike.  In essence, the mechanism will remain 
the subject of a "Declaration" annexed to the new 
treaty.  However, the Poles secured a legally binding 
Protocol specifying that the Ioannina mechanism can 
only be altered by consensus (meaning with Poland's 
consent). 
 
¶8.  Another demand from Poland to have its own 
advocate-general at the European Court of Justice, 
a right only Germany, the UK, France, Italy and 
Spain currently have, was met through an undertaking 
to create two new positions of advocate-general in 
2009, one of which would be reserved for Poland. 
The second position will allow for a better 
rotation of posts.  No treaty amendment is 
actually required for this change. President Lech 
Kaczynski concluded that "Poland got everything it 
wanted.  I'm very happy this business is behind us." 
 
BROWN REBUFFS CALLS FOR UK REFERENDUM 
------------------------------------- 
 
¶9.  The UK kept a fairly low profile in the Lisbon 
institutional discussions, having secured its "red 
lines" in the June 2007 European Council and the 
subsequent Intergovernmental Conference (IGC), 
in which legal experts drafted the treaty text. 
Gordon Brown, attending his first Summit in his 
capacity as Prime Minister, confirmed his endorsement 
of the draft before the meeting even started. 
Speaking at a press conference, Brown said the 
new treaty guaranteed British sovereignty in 
justice, home and foreign affairs and security 
issues.  In exchanges with UK press intended 
to defuse domestic criticism, Brown maintained, 
"On these major issues ... the British national 
interest is protected."  Brown consequently made 
it clear he had no intention of bowing to critics 
urging him to hold a referendum on the new treaty. 
"If it was the old draft Constitutional Treaty, 
there would have been a referendum, but this is 
an amending treaty."  Brown stressed it was time 
for the EU to move on to the major issues that 
affect the people of Europe, "that is better 
 
LISBON 00002680  003.3 OF 003 
 
 
jobs, that is higher prosperity, that is better 
security against terrorism, action against climate 
change.  These are the issues our people want us 
to address." 
 
OTHER COUNTRIES 
--------------- 
 
¶10.  Austria had called for the new treaty to 
provide a legal basis codifying the quotas 
imposed by universities on non-Austrian students, 
a measure in breach of existing EU rules by the 
EU Court of Justice.  The Austrians argue that 
their medical lecture halls are filled by German 
students bound to return to their country of 
origin after qualifying, a situation that could 
soon lead to a drastic shortage of doctors. 
Their EU partners countered that the problem 
should be solved with the Commission, which was 
prepared to give the Austrian government more 
time to provide additional data in support of 
its claim.  The Commission thus opened the way 
to a suspension of its ECJ proceedings against 
Austria and to a compromise solution to be 
worked out over time between Brussels and Vienna. 
 
¶11.  Further compromises were found in Lisbon 
or beforehand with the Czech Republic and 
Bulgaria, which had gripes, respectively, over 
the possibility of rescinding EU legislation 
and the spelling of the word "euro" in the 
Cyrillic alphabet. 
 
COMMENT 
------- 
 
¶12.  Although there remains some concern in 
EU capitals that PM Brown might still run 
into political troubles that would force him 
to hold a referendum, the "Treaty of Lisbon" 
was crafted in a way that makes its final 
ratification and entry into force a good 
probability.  The Lisbon deal, ending years 
of navel-gazing about the EU institutions, 
enables the EU-27 to turn their attention 
to the common challenges facing them in the 
globalization era, thus giving the EU a 
chance to reconnect to its citizens.  However, 
the leaders will likely encounter other bones 
of contention soon, including questions about 
the future course of the EU on the world stage 
and the limits of its integration and expansion. 
Hoffman