Leaders of the 27-nation European Union on Thursday signed a landmark treaty to revitalise decision-making after years of wrangling on how much power they are willing to hand over.
"History will remember this day as a day in which new paths of hope were opened toward the European deal," Portuguese Prime Minister Jose Socrates told the ceremony.
He insisted the treaty -- which replaces a planned EU constitution scuppered by French and Dutch referendums in 2005 -- is not a threat to the national sovereignty of member states.
The Treaty of Lisbon was only agreed after long and often acrimonious negotiations between supporters and opponents of closer integration however.
And the changes are likely to face new 'eurosceptic' opposition when they are discussed in national parliaments that have to ratify the treaty. Ireland has to hold a referendum.
EU leaders, who move on to a summit in Brussels on Friday, deem it vital to streamline the functioning of the bloc, which has grown from 15 to 27 nations since 2004 while pushing deep into the former Soviet bloc.
Like the rejected constitution, it proposes a European foreign policy supremo and a permanent president to replace the cumbersome six-month rotating presidency system.
It cuts the size of the European Parliament and the number of EU decisions, which require unanimous support, hence reducing national vetoes.
However it drops all references to an EU flag or anthem, to assuage eurosceptic fears of another step towards a federal Europe.
It also includes a European charter of fundamental human and legal rights, which Britain and Poland have refused to make binding.
"With the Treaty of Lisbon, Europe finally overcomes the political and institutional impasse that limited its capacity to act during the last few years," Socrates said.
"The European project does not eliminate nor minimise national identities," he insisted.
EU Commission Chief Jose Manuel Barroso said "the enlarged European Union gives us a new economic, political and strategic dimension."
"This dimension makes each member state stronger. And it makes Europe, united in its diversity, better equipped to promote its interests and values in the world," he added.