LISBON, Oct. 19 (Xinhua) -- Leaders of the European Union (EU) wrapped up their two-day informal summit here Friday, with a new treaty aimed at improving EU decision-making and pledges to better deal with the challenges of globalization.

    "We've managed to complete our plan at the summit," Jose Socrates, Prime Minister of Portugal, which holds the rotating EU presidency, told reporters at the end of the summit.

European Commission President Jose Manuel Barroso (L) and Portugal's Prime Minister Jose Socrates embrace after announcing that European Union leaders have struck a final agreement on a treaty to reform the bloc's ailing institutions after making last-minute concessions to Italy and Poland, in Lisbon October 19, 2007. (Xinhua/Reuters Photo)  Photo Gallery>>>

    "We had a treaty yesterday, and today we went straight into high quality debate on the real issue for the future ... the issue of how Europe can successfully rise to the challenges of globalization," he said.

    He said the EU is ready to tackle the challenges of globalization and intends to "lead" the world debate on globalization, in three areas in particular.

    The three areas are the redesigning of global institutions, the globalization agenda, which should be an agenda of innovation but not of isolation or protectionism, and the environmental issue, especially climate change.

    Climate change is the most severe challenge arising from globalization, he said.

    Socrates said Portugal will prepare a declaration on globalization, which will be submitted to discussion at the Dec. 13 summit in Lisbon. Portugal will also push for the formation of a "group of wise men," who will make proposals for the EU to cope with globalization.

    Meanwhile, he said the EU leaders also discussed the issue of stability of the EU financial market.

    He said the leaders have confidence in the EU economy, and pledged their full support to the EU finance ministers who are drawing up a plan to increase transparency on risk assessment of the financial market.

EU Comission President Jose Manuel Barroso talks to journalists after the end of the EU Informal Summit at Atlantic pavilion in Lisbon October 19, 2007. (Xinhua/Reuters Photo)  Photo Gallery>>>

    At the joint press conference with Socrates, European Commission President Jose Manuel Barroso said the Lisbon summit has the importance of "a milestone."

    "We turned a page in Lisbon. Now we look into the future confidently," he said.

    He said the EU must protect its citizens without being protectionist, and should not close its doors, and also encourage others to open their doors.

    On climate change, he said the momentum is with the EU after the Group of Eight summit last June.

    He said the UN framework and the setting of "binding, mandatory" targets is the "right way forward." He also said that Europe must " continue to show leadership" on the issue, with the EU executive playing its part.

    "I promise to bring forward an ambitious package in January to implement those decisions," he said, in order to keep up "pressure" on progress leading up to a summit in Copenhagen, Denmark, in 2009.

    Early Friday morning, the EU leaders adopted the new treaty, the so-called Treaty of Lisbon, which will improve EU decision making and streamline EU institutions.

    "The treaty is the basis of the renewed Lisbon strategy," said Barroso. "With the agreement, we can now start to build for reforms."

(L-R) Germany's Chancellor Angela Merkel, France's President Nicolas Sarkozy and Britain's Prime Minister Gordon Brown chat on the second day of a European Union summit in Lisbon. (Xinhua/AFP Photo)  Photo Gallery>>>

    The new treaty will replace the defunct EU constitution, which was rejected by French and Dutch voters in referenda in 2005.

    The document will be signed on Dec. 13 in Lisbon by the EU leaders, and will be signed by the member states before it takes effect on Jan. 1, 2009.

    Among institutional changes, the new treaty installs a new foreign policy chief for the EU and a long-term president for the European Council to replace the current six-month rotating presidency, but it avoids any mention of what may suggest a constitutional nature, such as EU symbols -- the flag, the anthem and the motto.

    It also introduces the double majority voting system in decision-making, reduces the size of the executive European Commission, and gives national parliaments more power.

    The deal was possible after last-minute concessions were made to some aggressive demanders, notably Poland and Italy.

    Poland threatened to veto the treaty unless the so-called "Ioannina" mechanism, which allows a minority group of states disagreeing with a resolution to freeze it for a considerable period of time, was written into the new treaty.

    Under a compromised arrangement, though there will be no Ioannina clause in the treaty, the European Council, composed of 27 EU leaders, will adopt a declaration on the substance of the Ioannina mechanism, making it legally binding. In addition, the declaration will be attached with a protocol, which requires consensus in any change to the Ioannina mechanism.

    Another Polish demand, a permanent advocate general on the European Court of Justice, was also satisfied.

    "Poland has got everything it asked for," said Polish President Lech Kaczynski after the talks.

    Italy had disagreed with the plan to redistribute EU parliamentary seats. According to the new rules, Rome's seats in the European Parliament should be cut from 78 to 72 in 2009, the biggest decline among member states.

    The EU leaders finally agreed to add one more seat to Italy without breaching the 750-member cap by excluding the non-voting president of the parliament from the count.