European Union (EU) leaders agreed on Friday to provide legally-binding guarantees to Ireland to secure the country's approval of the reforming Lisbon Treaty and clinched a deal to strengthen pan-European financial supervision.

IRELAND'S DEMANDS SATISFIED

"This decision gives legal guarantees that certain matters of concern to the Irish people will be unaffected by the entry into force of the Treaty of Lisbon," EU leaders said in a conclusion after a two-day summit here.

Czech Prime Minister Jan Fischer, whose country holds the EU's rotating presidency, told reporters that the guarantees are in legal sense to clarify the Lisbon Treaty, not to amend it, so they would not lead to the re-opening of the ratification process in other EU countries.

"This decision will not necessitate any re-ratification of the Treaty of Lisbon," EU leaders said, adding that it "is legally-binding and will take effect on date of entry into force of the Treaty of Lisbon."

The summit spent a lot of time on the issue as other EU member states worried that the guarantees for Ireland would lead to the possibilities of renegotiating the treaty.

Emerging from hard-fought negotiations, European Commission President Jose Manual Barroso said that the Irish people got "all the assurances they need."

The guarantees concern Ireland's military neutrality, tax policy and the right to life, family and education, as well as other social issues including workers' rights.

"The guarantees must be sufficient in the light of the concerns of Irish citizens, yet they must not lead to the re-opening of the ratification process of the Lisbon Treaty in other member states," the Czech presidency said. "Thus, the text of the guarantees explicitly states that the Lisbon Treaty is not changed thereby."

The Irish voters rejected the Lisbon Treaty in June last year. The treaty, designed to reform EU institutions and streamline its decision making after its expansion, requires ratification from all 27 EU member states before it can come into force.

The endorsement of the legally-binding guarantees for Ireland paves the way for the country to hold a second referendum on the Lisbon Treaty in the autumn of this year.

FINANCIAL SUPERVISION STRENGTHENED

EU leaders also managed to strike a deal to introduce a new system of pan-European financial supervision to prevent recurrence of the present crisis.

"There was a consensus about the need for a real European approach for financial supervision," European Commission President Jose Manuel Barroso told reporters after a meeting with EU leaders, which concluded Friday.

Barroso said the new EU-wide system will not take away the role of national supervisors, but enhance it and put it into a European framework.

The reform plan involves the creation of four European watchdogs to strengthen EU-wide financial supervision at both macro- and micro- level.

On the macro level, a European Systemic Risk Board (ESRB) comprising central bankers and national regulators would be established to monitor and assess risks to the stability of the financial system as a whole.

By providing analysis, issuing early warnings of system-wide risks and recommendations to deal with these risks, the new body would for the first time equip the EU with a pan-European macro-prudential supervision system.

On the micro level, three new European authorities would be responsible to supervise banks, insurers and stock markets respectively.

A compromise was found after concessions were made to Britain, which had been reluctant to hand over too much control over its financial sector to the EU.

London was in particular concerned about the power of the three new European authorities to overrule national decisions and adjudicate disputes between national regulators, fearing a member state may be at risk of being ordered to carry out costly bailouts of major banks in time of crisis so as to prevent spill-over effects in others.

Following the endorsement by EU leaders, the commission is scheduled to put forward legislative proposals in autumn and a new pan-European framework of financial supervision is expected to be born in 2010.

SUPPORT FOR BARROSO'S REAPPOINTMENT

On the first day of their two-day summit, EU leaders handed down their blessing to Barroso's bid for a second term as the European Commission chief.

"I am very glad that Jose Manuel Barroso received broad, indeed unanimous, support among heads of state and government. They clearly support his candidacy as future president of the European Commission," Fischer told reporters in the early hours of Friday.

But Barroso still needs approval from EU lawmakers, which has a joint say with EU government on the choice of the commission chief, to secure his reappointment.

Fischer said the Czech government and Sweden, the next EU presidency, will now start consultation with different political groups in the European Parliament.

Although Barroso has guaranteed support from the center-right European People's Party, the largest political group in the parliament which he belongs to, the Socialists, the second largest group, and smaller Greens have voiced their opposition to Barroso's second term.

This is also a tricky issue clouding the parliament's approval, which is related to the Lisbon Treaty.

Following EU-wide elections early this month, the newly-installed European Parliament will convene for its first meeting in mid-July.

If the European Parliament votes next month, the existing EU Nice Treaty will apply, under which a single majority will be enough for Barroso's reappointment. It will not be a hard job.

But if the European Parliament delayed the approval until the Lisbon Treaty is finally ratified, support from an absolute majority of the whole assembly, rather than those present, would be required, making Barroso's bid more difficult.

It remains unclear whether the EU assembly would decide Barroso's reappointment soon, but EU leaders urged the European Parliament to make a decision as soon as possible in order to ensure institutional stability in the face of the economic crisis.

In preparation for the year-end global talks in Copenhagen on the fight against climate change, EU leaders set out the principles to determine international burden-sharing in financial contribution to help poor countries.

"All countries except the least developed should contribute to the financing of the fight against climate change in developing countries on the basis of a universal, comprehensive and specific contribution key," they said.

"The main principles of contribution should be the ability to pay and the responsibility for emissions," they added.

Source: Xinhua