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Hopes high that EU leaders can seal agreement on reform treaty

(LISBON) - European leaders were gathering in Lisbon Thursday amid high hopes they can reach agreement on a landmark EU reform treaty by overcoming the last few remaining complaints from member states.

European Commission chief Jose Manuel Barroso set the tone before he headed for the Portuguese capital on Wednesday, saying he was confident a deal could be struck, adding that he hoped the two-day summit "will not be the battle of Lisbon".

"Everybody is coming to Lisbon in a spirit of commitment to a solution," he said in Brussels.

Poland and Italy were among the nations still with gripes ahead of the two-day informal summit, but most EU observers were predicting these could be overcome, deferred or ignored.

However some Brussels diplomats see Poland's ruling Kaczynski twins as particularly unpredictable as they have one eye on the home audience ahead of legislative elections on Sunday.

If the summiteers do agree the treaty text, the European Union will lurch out of the political impasse that has dogged the 27-nation bloc since French and Dutch voters rejected a proposed EU constitution in 2005.

Like the constitution, the treaty includes plans for a European foreign policy supremo and a longer-term president to replace the current cumbersome rotating presidency system.

However it only amends, rather than replaces, the EU's existing treaties, a point which national leaders, especially British Prime Minister Gordon Brown, have argued means there is no need for unpredictable national referendums this time round.

The text also gets rid of mention of the European anthem and flag, to avoid riling the eurosceptics who see the treaty a step down the road to federalism.

Brown, attending his first EU summit since taking over from Tony Blair, has declared himself satisfied with the "red line" policy opt outs which London has obtained in the treaty and urged his fellow leaders to endorse it.

"This summit comes at a critical juncture for the European Union. For the first time in its history, the EU has an opportunity to become a genuinely global player," Brown said in a letter to his fellow EU leaders on the eve of the summit.

But while Britain has secured most of its "red line" demands, including an opt-out from the Charter of Fundamental Rights attached to the treaty, Warsaw was still pushing for changes in voting rights ahead of the summit.

Poland wants the text to include the so-called "Ioannina" compromise, named after the Greek city where it was reached, allowing a minority of nations to temporarily block EU decisions.

The largest of the countries to join the EU since May 2004 also wants its own permanent advocate general at the European Court of Justice, like older, big member states.

Despite the demands, Polish Foreign Minister Anna Fotyga declared in Luxembourg on Monday: "We are very close" to finding a solution.

Italy is angry that it will emerge under the new treaty with fewer seats at the European Parliament than France and Britain, and wants more discussion.

Italian Prime Minister Romano Prodi said Wednesday that Rome "cannot accept" the planned reductions in seats, made necessary as the treaty reduces the overall number of members of the European Parliament from 785 to 750 in the next legislature from 2009.

If the leaders back the new text by Friday, they could formally sign it in December. That would leave a year for member states to ratify it so that it could come into effect, as planned, on January 1, 2009, ahead of the next EU elections.

The leaders agreed in June on the broad guidelines for the new document, aimed at streamlining decision-making in the enlarging bloc. Since then, legal experts have produced the draft text running to more than 250 pages.

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