The European Union is expected to take a key step towards the Lisbon Treaty becoming law across the continent this week when Germany's highest court rules that the new treaty is broadly compatible with German's constitution.

The ratification of Lisbon Treaty will give the EU more streamlined institutions with greater central power and, for the first time, a new President of Europe to represent all the member states around the world.

The German constitution says yes to the Lisbon treaty, but on a national level the parliament has to have a stronger say in EU matters, vice-president of the German constitutional court, Andreas Vosskuhle, said on Tuesday after reading the verdict.

Germany's parliament voted overwhelmingly in favor of the treaty last year, but the final step of ratification, signature by President Horst Koehler, had not been taken due to the court challenge.

The court said that the treaty and the German constitution would not allow the creation of an EU federal state,” however.

German's decision may have a substantial impact the treaty's ratification calendar. Of the EU’s 27 member states, only three – Poland, The Czec Republic, and Ireland, -- will still have to complete formal ratification of the treaty.

The former two countries merely need their presidents' signatures on the legislation to finalize the process. While Ireland, where voters rejected the Treaty last year, will stage a new referendum in October as the government gained more confidence of a Yes vote after the EU assured Ireland of its independence over taxation, security, defense, abortion, and workers' rights.

European Commission chief Jose Manuel Barroso welcomed the judgment saying the Treaty of Lisbon is essential for the EU's capacity to act in present times.

He also said he was confident that ratification of the document would be completed by all member states by the autumn.

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