What is the 'Lisbon Treaty'

The Lisbon Treaty updated regulations for the European Union, establishing a more centralized leadership and foreign policy, a proper process for countries that wish to leave the Union, and a streamlined process for enacting new policies. The treaty was signed on December 13, 2007, in Lisbon, Portugal, and amends the two previous treaties that established the foundation for the European Union.

Also known as the Treaty of Lisbon.

'Lisbon Treaty'

Before the Lisbon Treaty

The Lisbon Treaty was signed by the 27 member states of the European Union and officially took effect in December of 2009, two years after it was signed. It amends two existing treaties, the Treaty of Rome and the Maastricht Treaty.

  • Treaty of Rome: Signed in 1957, this treaty introduced the European Economic Community (EEC), reduced customs regulations between member countries, and facilitated a single market for goods and the set of policies for transporting them. Also known as the Treaty on the Functioning of the European Union (TFEU).
  • Maastricht Treaty: Signed in 1992, this treaty established the three pillars of the European Union and paved the way for the euro, the common currency. Also known as the Treaty on European Union (TEU).

While these previous treaties set ground rules and tenets of the European Union, the Lisbon Treaty went further to establish new Union-wide roles and official legal procedures.

What the Lisbon Treaty Changed

The Lisbon Treaty was built on existing treaties but adopted new rules to enhance cohesion and streamline action within the European Union. Important articles of the Lisbon Treaty include:

  • Article 18: Established protocol for electing a High Representative of the Union for Foreign Affairs and Security Policy. Elected in or out of office by a majority vote, this Representative oversees the Union's foreign and security affairs.
  • Article 21: Detailed global diplomatic policy for the European Union, based on the principles of universal human rights, democracy and development. The Union pledged to forge alliances with those countries that support these beliefs and reach out to third-world nations to help them develop.
  • Article 50: Established procedures for a member country to leave the European Union.

The Lisbon Treaty also replaced the previously rejected Constitutional Treaty, which attempted to establish a Union constitution. Member countries couldn't agree on the voting procedures established in the constitution, since some countries, such as Spain and Poland, would lose voting power. The Lisbon Treaty resolved this issue by proposing weighted votes and extending the reach of qualified majority voting.

Opinions of the Lisbon Treaty

Those who support the Lisbon Treaty argue that it enhances accountability by providing a better system of checks and balances, and that it gives more power to the European Parliament, which has major influence in the Union's legislative branch.

Many critics of the Lisbon Treaty argue that it pulls influence toward the center, forming an unequal distribution of power that ignores the needs of smaller countries.

  1. IRS Publication 901

    A document published by the Internal Revenue Service (IRS) that ...
  2. Maastricht Treaty

    The Maastricht Treaty was a treaty that is responsible for the ...
  3. Surplus Share Treaty

    A surplus share treaty is reinsurance in which the ceding insurer ...
  4. Second Surplus

    Second surplus describes a reinsurance treaty that provides coverage ...
  5. Eurasian Economic Union (EAEU)

    The Eurasian Economic Union (EAEU) is an economic union created ...
  6. Provisional Notice Of Cancellation ...

    A provisional notice of cancellation is a notice that one party ...
Related Articles
  1. Investing

    Brexit: Would the Swiss Model Work?

    Learn how the Swiss model would work for the UK after Brexit.
  2. Trading

    Pound Falls as May Promises March Brexit Move

    The pound fell to a three-year low against the euro following Theresa May's promise to begin Brexit negotiations in the first quarter of next year.
  3. Retirement

    Top 4 Retirement Cities in Portugal

    With its low cost of living and diverse towns and cities, Portugal has a lot to offer retirees. Here's how to find the right place for you.
  4. Retirement

    How Much Money Do You Need to Retire in Portugal?

    Portugal is often cited as one of the, if not THE, most affordable European retirement destination. Here's a rundown of some typical costs for retirees.
  5. Financial Advisor

    Advisors: Don’t Overlook This Foreign Dividend Tax

    Paying income tax on income earned from foreign investments can be a tricky proposition. Here's what advisors and their clients need to know.
  6. Insights

    Britain Could Face €63B Payment When It Leaves EU

    That charge includes commitments made by Britain to the treaty, such as pension and loan charges.
  7. Insights

    Unions: Do They Help or Hurt Workers?

    Learn the pros and cons of these organizations and how they fit into today's economy.
  8. Insights

    Cameron to Step Down After Brexit Vote

    British Prime Minister David Cameron is to step down after
  9. Personal Finance

    The History Of Unions In The United States

    Although the overall power of labor unions may not be what it once was, they still maintain a great deal of influence in the United States.
  10. Insights

    Europe Talks Tough on Brexit Deal in Leaked Documents

    The European Parliament wants its way on migrants, money, courts and, most importantly, time.
  1. When and why did the euro make its debut as a currency?

    On January 1, 1999, the European Union introduced its new currency, the euro. Learn more about its history. Read Answer >>
  2. What are some historic examples of hyperinflation?

    Learn how skyrocketing prices can result in an economy spiraling into hyperinflation, as happened in Germany, Zimbabwe and ... Read Answer >>
Trading Center