Deals on climate and economy sealed in Brussels

After two days of intense negotiations, European leaders reached agreement on how to achieve the EU’s ambitious climate change goals and endorsed a €200bn plan to revive the flagging EU economy. They also worked out a plan with Ireland for ratifying the Lisbon treaty.

Commission president José Manuel Barroso hailed the agreements as “historic decisions” and called on the world to follow the EU’s action on climate change. “Yes you can. You can do what we are doing,” he said at a news conference wrapping up the year’s final EU summit.

The meeting in Brussels was a crucial test of European commitment to fight global warming. The EU has the world’s most ambitious climate change targets, including a 20% cut in greenhouse gases by 2020. But EU leaders and lawmakers have been debating most of the year how to achieve these goals. Divisions sharpened after the financial crisis crippled the European economy, with some countries concerned about the cost to industry.

The agreement will give the EU more clout at international climate talks next year. The EU is hoping others - like the United States, China, India, Russia and Brazil - will follow its example. “Europe has passed its credibility test,” Mr Barroso said.

EU countries also reached agreement on an economic stimulus package to ease the effects of the financial crisis. The package of growth measures is worth about €200bn, or 1.5% of total EU output. The bulk of the money - €170 billion - will come from national budgets. The remaining €30 billion is to come from the budgets of the EU and the European Investment Bank. Governments would spend the money in the way best suited to their economic needs.

On the Lisbon treaty, Ireland agreed to hold a second ballot next year once the concerns of Irish voters are addressed. The treaty was rejected in a referendum in June, putting on hold a long-awaited reform of EU institutions.

Many Irish are worried about how the treaty would affect the country’s taxation policies, its military neutrality and ethical issues such as abortion. The council offered Ireland legal guarantees that the treaty would not infringe on the government’s authority in those areas.

Irish voters also objected to a plan to cut the number of European commissioners, under which member countries - Ireland included - would lose their automatic right to a commissioner. The council agreed to take the necessary legal steps so that if the treaty takes effect, all 27 EU countries could continue to have a commissioner in Brussels.