The heads of government meet in Amsterdam and draft a new agreement which updates the Maastricht Treaty and starts to get the EU ready for its eastward expansion.
Laws on employment and discrimination are strengthened and the social chapter of the Maastricht treaty becomes an official part of EU law.
The Schengen agreement, scrapping border controls becomes part of EU law though Ireland and the UK maintain their opt-outs. This gives the EU more say on immigration and asylum.
Amsterdam aims to make the EU more democratically accountable and extends the parliament's powers. Qualified majority voting is introduced into new areas, reducing individual countries' powers to veto new measures.
This is also the beginning of a two-speed Europe. The treaty allows for "closer co-operation" or "flexibility" between countries which want to forge ahead on certain issues.
