European Union leaders meet in Lisbon on 18-19 October 2007 to reach final agreement on the EU's new "reform treaty". A deal is within reach, provided a prickly Polish government - which faces a national election on 21 October - does not create a last-minute obstacle. Some countries have been thinking about holding a referendum on the new treaty. But with the exception of Ireland (which it is mandatory by law), they are likely to decide against it.

This treaty does not transfer sovereignty from member-states to Brussels in significant areas. Its aim is to improve the functioning of the EU after its membership has grown to twenty-seven with the accession of Bulgaria and Romania in January 2007. Moreover, a few states - most prominently, the United Kingdom - have negotiated a number of special provisions and opt-outs that allow them to stay aloof from the treaty's more radical changes.

From "constitution" to "treaty"

The Portuguese, who hold the EU's rotating presidency in the second half of 2007, hope that the document will be called the "Treaty of Lisbon", in line with the EU tradition of naming a treaty after the city in which it was agreed. Other European governments will prefer to stick with "reform treaty", to signal that it is less ambitious than the constitutional treaty, rejected in the French and Dutch referenda of 2005. Like the treaties of Amsterdam (1997) and Nice (2000), the new treaty consists of provisions that amend the EU's founding charters.

Katinka Barysch is deputy director of the Centre for European Reform

Hugo Brady is research fellow on European Union institutions, and justice and home affairs, at the Centre for European Reform This article draws on the is the authors' briefing note, "The CER guide to the Reform Treaty" (October 2007)

Also by Katinka Barysch in openDemocracy:

"Ukraine should not be part of a ‘great game'" (7 December 2004) - with Charles Grant

"Turkey and the European Union: don't despair" (27 November 2006)

The constitutional treaty should have been much easier to read and understand, since it consolidated all existing treaties into one document. However, this consolidation itself made it hard for Europeans to distinguish old provisions from new ones. The result was that long-standing EU principles, such as the supremacy of EU law or the free movement of workers, suddenly became controversial.

Many people also disliked those bits that made the treaty look like a national constitution: its ambitious-sounding preamble, the clauses on an EU flag and anthem (both of which were officially adopted in the 1980s), and the inclusion of a "charter of fundamental rights and freedoms". The reform treaty abandons most of these constitutional trappings. It does preserve the parts on human rights, which most Europeans think is a good thing. Most of the other clauses that have been kept from the failed constitutional treaty are designed to make the EU work better.

Here are seven examples:

* A full-time European council president
The council of the European Union, where the heads of government of EU member-states meet every three months, will have a full-time chairperson or "president"; this figure, chosen by EU governments, will chair their meetings for a term of two-and-a-half years, renewable once. The logic is plain: enlargement to twenty-seven states has meant that the longstanding system of a presidency that "rotated" from one country to the next every six months is now effectively unworkable. Some smaller countries have struggled with the huge task of running the EU's complex agenda; and big ones sometimes mix up their own priorities with the EU's overall interest. The new system will clarify and simplify matters

* A clearer, fairer voting system
It is the regular meetings of EU ministers with competence in particular policy-areas - such as finance, transport, farming, security, environment - that make the decisions on EU laws. This so-called "council of ministers" (not to be confused with the European council) currently operates according the Nice treaty's complex "triple-majority" voting system. The reform treaty's "double- majority" voting system that replaces this is both fairer and more transparent.

The new system gives countries with larger populations some more weight, by allowing a measure to pass if it is supported by 55% of the member-states (currently fifteen out of twenty-seven) provided they represent at least 65% of the EU's population. At least as important as a country's numerical voting strength, however, is its ability to build coalitions. This fact seemed to have been lost on Poland's Kaczynski brothers (Lech, the president, and Jaroslaw, the prime minister) when they threatened to veto the entire treaty in June 2007; eventually, they agreed to the double-majority model, but wrung the condition that it would only be phased in in 2014-17.

* A smaller commission
The European commission has long been composed of individual commissioners from each member-state. With twenty-seven such states and each commissioner needing his or her own portfolio, the system has become over-extended (there is even a commissioner in charge of promoting multilingualism now) and unwieldy (the commission president, Jose Manuel Barroso, struggles to make his twenty-six colleagues behave like a coherent cabinet).

So after 2014, the number of commissioners will be capped at two-thirds of the number of member-states. However, there is a risk that efficiency will come at the price of legitimacy: although commissioners are not supposed to act in "their" national interest, Europeans usually do feel represented by "their" envoy to Brussels. It would have been better had the EU kept the one-commissioner-per-country system but split them into senior and junior commissioners to reduce the number of portfolios.

* A stronger foreign-policy representative
The European Union's big challenges increasingly lie outside rather than inside its borders. The fight against poverty in Africa, the need for international cooperation on climate change, the future status of Kosovo, the prospect of a nuclear-armed Iran, and the reality of a resurgent Russia are just five examples. At present, the EU's foreign-policy machinery is ineffective in meeting such tests.

The council's high representative (currently Javier Solana) in principle has the political authority that comes from speaking on the EU's behalf - provided the twenty-seven member-states agree on what he should say. But they may not, and in any case he has few resources.

The commissioner for external affairs (currently Benita Ferrero-Waldner) has a €10 billion annual budget and a big team of specialists. But since foreign policy is decided by the council, not the commission, she has little diplomatic weight. Cooperation between the two foreign-policy figureheads is often difficult, and sometimes entirely absent.

The reform treaty therefore proposes the only sensible solution: a merger of the two posts into one. In response to British pressure, the new post will not be called the "EU foreign minister" but rather the "high representative for foreign policy and security". This title is more accurate if less catchy: the new high representative will have few powers of his or her own and will only be able to act if there is unanimous agreement among the twenty-seven. Nevertheless, the British government has insisted that a declaration be attached to the new treaty to specify that the new EU position will not affect British foreign policy.

* Majority voting on internal security
The new treaty scraps national vetoes in about fifty areas, most of which are of minor importance. The notable exception are decisions on EU cooperation to combat terrorism, crime and illegal immigration (what officials refer to as justice and home affairs [JHA]).

In most policy areas, such as the single market or transport, the procedure is clear: the commission drafts laws, the council of ministers decides on them, and the European court of justice (ECJ) has the right to rule on whether the member-states comply with them. By contrast, decisions on JHA require unanimity, and they are beyond ECJ jurisdiction. The need for painstaking consensus has resulted in frequent delays and watered-down compromises in this hugely important policy area; and the lack of ECJ involvement has raised concerns that EU legislation could infringe human rights.

Therefore, from 2009 most JHA issues will be dealt with like normal EU business. Since many questions concerning criminal justice or migration are sensitive, there is an "emergency brake" for JHA in the treaty. At the same time, the British government (along with Ireland) has insisted on an opt-out from all JHA policies, which allows it to decide in each case whether it wants to be involved.

* Human rights apply to EU laws
The reform treaty will make the EU's charter of fundamental rights legally binding, but only on European legislation. The charter mainly consists of rights and freedoms that EU countries have signed up to in various other documents, such as the European convention on human rights. It adds some aspirational "principles", such as the right to job-training and healthcare, but specifies that these will only have meaning insofar as they are already applied and practiced in the individual member-states.

Some in Britain nonetheless worry that such principlesmight serve as a loop-hole to undermine the country's liberal labour laws. The treaty now includes a special protocol (not strictly speaking an opt-out), underlining that the charter creates no new social or labour rights in Britain. Poland also signed up to this protocol but for different reasons: it was concerned that the charter's individual freedoms could clash with the conservative and religious values upheld by many Poles.

openDemocracy writers track the European Union in a decisive year:

Aurore Wanlin, "The European Union at fifty: a second life" (15 March 2007)

Krzysztof Bobinski, "European unity: reality and myth" (21 March 2007)

Frank Vibert, "The European Union in 2057" (22 March 2057)

George Schőpflin, "The European Union's troubled birthday" (23 March 2007)

Simon Berlaymont, "Tony Blair and Europe" (30 May 2007)

Kalypso Nicolaïdis & Philippe Herzog, "Europe at fifty: towards a new single act" (21 June 2007)

John Palmer, "Europe's next steps" (26 June 2007)

Krzysztof Bobinski, "The Polish confusion" (28 June 2007)

Michael Bruter, "European Union: from backdoor to front" (3 July 2007)

Olaf Cramme, "Europe: politics or die" (17 September 2007)

Kalypso Nicolaïdis & Simone Bunse, "The ‘European Union presidency': a practical compromise" (10 October 2007) * A stronger say for national parliaments
The reform treaty will for the first time allow national parliaments to challenge a piece of European legislation that they think clashes with the principle of subsidiarity (i.e., that the EU should only legislate if more effective action cannot be taken at the national or local level). If a third of national parliaments express concerns, the commission needs to explain why the legislation is needed, or submit a redrafted version. If half of them are unhappy, a majority of member-states or members of the European parliament(MEPs) can insist that the draft is withdrawn.

The politics of treaty-change

The process of amending the EU's treaties has never been easy or straightforward. However, if and when the reform (or Lisbon) treaty finally enters into force in 2009, it will mark the end of a particularly arduous episode of EU treaty-change.

The negotiations started in February 2002, when a "European convention" of diplomats, parliamentarians and NGOs began to draft the constitutional treaty. In June 2004, all EU countries signed this treaty, and eighteen have subsequently ratified it. But the "no" votes in the referenda in France and the Netherlands in May-June 2005 forced the EU into a year-long "pause for reflection".

During this period, most EU member-states came to agree that calling the treaty a "constitution" had been overly ambitious and rather misleading. But all agreed that an EU with twenty-five countries (after the enlargement of May 2004) and twenty-seven (in January 2007) - with even more to come - needs better ways of making decisions, implementing foreign policy and working together on internal security.

So although several EU countries used the reopening of treaty talks to make additional demands, most of these were minor or of little practical consequence. For example, the Netherlands insisted that the EU include the accession ("Copenhagen") criteria into the treaty - even though these already applied to the 2004 and 2007 enlargements and to all current applicants (including Turkey and several Balkan countries). France's Nicolas Sarkozy struck "undistorted competition" from the list of basic EU objectives - but a new protocol reinforces the role of EU competition policy at the same time. Britain, again, made the strongest demands during the negotiations - and obtained everything it wanted: a relatively modest amending treaty riddled with special declarations and opt-outs.

A deal in Lisbon, and then?

The size of the European Union - with more countries likely to join in the next decade - means that reaching the kind of comprehensive compromise needed to agree EU treaties is becoming very difficult. Most European leaders agree that the EU has more important things to do than to fiddle with its institutions and decision-making procedures. And since any substantive new treaty would probably be subject to a referendum in at least a few EU countries, the risk of failure would be high.

So the Europeans will want to avoid another round of treaty-change for as long as possible. The EU can use the accession treaties it signs with newcomers to make minor changes to the way it is run; and it can launch new policies through other types of inter-governmental agreement. These, however, diminish the need to bring everyone on board. So it is more likely that smaller groups of EU countries will go ahead with new projects and policies, leaving behind those who are unwilling or unable to participate. If the negotiations for the reform treaty are anything to go by, it is already becoming clear which states will take part in future initiatives and which will not.