European leaders hugged each other and toasted with champagne after clinching a full agreement on a treaty to reform the bloc's institutions on Friday (October 19). They made last-minute concessions to Poland and Italy to get the treaty which will be signed on Dec. 13 in Lisbon. If ratified by all 27 member states, the treaty would come into force in 2009, it would give the bloc a long-term president, a stronger foreign policy chief, a more democratic decision-making system and more say for the European and national parliaments. "What's very important is that I can announce the new treaty of Lisbon today, we'll be signing this treaty on the 13th of December in Lisbon. This is a victory for Europe, ladies and gentlemen," Portuguese Prime Minister Jose Socrates, the summit chairman, told a news conference. Provided it is ratified by all 27 member states, the treaty will take effect in 2009 giving the EU a long-term president, a more powerful foreign policy chief, more democratic decision making and more say for the European and national parliaments. "With this issue settled we can now look at the items that are on the agenda for tomorrow how can Europe defend its interests in the age of globalisation, how we can succeed in the age of globalisation, how can we defend and promote our interests and our values in the 21st century. so once again congratulations for the portuguese presidency and lets now go on with our work, we have indeed a lot of exciting work to do in the next years and I believe today, it was indeed a major achievement and personally you can imagine I am very happy that this achievement was build here, in Lisbon," European Commission President Jose Manuel Barroso said. The deal, clinched shortly after midnight,a crisis opened by Dutch and French voters' rejection of the European constitution in 2005 in a stunning vote of no confidence in an organisation seen by many as remote and bureaucratic. This time only Ireland is likely to hold a referendum. The more modest treaty is not styled a constitution and omits any mention of an EU anthem or flag, but it retains all the key reforms in the original charter. In the final wrangling, Italy won one extra seat in the European Parliament. Poland won a guarantee that a provision allowing small groups of states to delay EU decisions could only be overturned by unanimity, plus a permanent advocate-general's job at the European Court of Justice for a Pole. There were also concessions on side issues to Austria, Bulgaria and the European Parliament in a typical package deal. Warsaw, which before the start of the two-day summit had threatened to delay the talks if its demands on new voting arrangements were not met, said its key demand had been met. Polish President Lech Kaczynski told reporters his country had achieved what it wanted. "We held a lengthy discussion a very productive, conciliatory and positive discussion with the Portuguese presidency and I would like to thank the Portuguese presidency in particular without them we would not have achieved this success. Basically Poland got what it wanted. Another thing is that the whole operation called the EU reform treaty - we don't have a constitutional treaty, we have a reform treaty - this whole operation is now crowned with success," he said. Poland had fought against the changed voting system at a bitter summit in June, saying it would give too much power to Germany, Europe's most populous nation, at Warsaw's expense. Other leaders ascribed Kaczynski's brinkmanship to the fact that Poland holds an early parliamentary election on Sunday. The president's brother, Prime Minister Jaroslaw Kaczynski, is fighting for re-election and flagging in opinion polls. He denied that the wranglings in Lisbon and the deal had anything to do with the elections. Warsaw's main demand was to enshrine in the treaty, or as a protocol, the so-called Ioannina compromise enabling groups of countries just short of a blocking minority to delay a decision for a "reasonable time" -- in practice, several months. The EU has spent a decade agonising over how to reform its institutions to cope with its near doubling in size from 15 to 27 members, and to the emergence of new challenges in foreign and defence policy, energy and climate change. British Prime Minister Gordon Brown, rejecting domestic pressure to hold a referendum, defended the new arrangements which Britain had demanded to ensure its sovereignty is not undermined by the charter. Italy went into the summit insisting on maintaining parity with France and Britain in European Parliament seats, despite a reallocation plan proposed by the assembly which would give it fewer deputies based on population size. Italian Prime Minister Romano Prodi at his hotel said the deal meant Europe could move forward. ''We do have a treaty. We are very happy. It is truly the end of a long period of difficulties for European history," Prodi said. The Portuguese compromise, backed by the three main political groups in parliament, gives Italy 73 seats, like Britain, but one fewer than France. One snag was removed when Austria accepted a European Commission move to suspend legal action against it for five years over quotas on foreign students, designed to stop medical students from neighbouring Germany swamping its universities. Another was solved when EU leaders agreed to allow Bulgaria the right to spell the common euro currency as "evro" in its Cyrillic language, despite the insistence of the European Central Bank that euro be spelled the same in all 27 EU states.