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Czech Republic Takes Over EU Chair Amid Crisis

For the next six months, Prague will set the agenda for the European Union. It looks to be a tough tenure as the EU struggles to deal with renewed conflict in the Mideast and faces its worst economic crisis in decades.

Fireworks explode over the statue of an angel on one of Prague's bridges

Prague celebrates the start of what could be a difficult EU presidency

On Jan. 1, the Czech Republic takes charge of the European Union in the midst of global tension over the Middle East and European worries over a gas dispute with Russia.

The former communist country, which joined the EU only four years ago, has been working hard to prepare for its six months in the spotlight. In recent weeks, Czech officials have been brushing aside concerns that they are not ready for the responsibility of leading the 27-nation bloc.

Hard act to follow

Czech President Vaclav Klaus speaks during the meeting of both houses of Czech Republic Parliament

Czech President Vaclav Klaus is an outspoken critic of Europe

Skeptics have pointed out that Europe is in the midst of a financial crisis, which requires a united European response. It's hard for many to imagine that kind of leadership coming from Czech President Vaclav Klaus, a euro skeptic who continuously criticizes most things European in his speeches and statements.

Many analysts also point to the fact that Prime Minister Mirek Topolanek's minority government has dragged its feet on the Lisbon reform treaty, a charter intended to streamline EU decision making. The Czech Republic is one of just three EU members who have yet to ratify the treaty.

It also won't be easy for the Czech Republic to take over the reigns from France. French President Nicolas Sarkozy was seen as running an extremely successful agenda-setting presidency up to the very end when he spearheaded diplomatic efforts to negotiate a ceasefire in the Middle East.

Priorities are set

The Czech delegation has tried to quell worries over their ability to lead the EU, identifying three main priorities: energy security, external relations and the economy, said Czech Deputy Prime Minister Alexandr Vondra

"We will be glad if we manage to complete two specific things," Vondra said, alluding to energy security issues and the EU's eastern partnership.

A Ukrainian worker operates valves in a gas storage and transit point in Boyarka, just outside Kiev

European energy security will be a top agenda item

One of the first issues will undoubtedly be the ongoing disagreement between Ukraine and Russia over gas supplies. After failing to negotiate an agreement over gas payments for 2009, Russia announced it would cut off gas supplies to Ukraine starting Jan. 1.

A cut in deliveries could be felt in Europe, which gets most of its Russian gas via Ukraine. Past disputes between the two countries have lead to reductions in delivery.

EU foreign ministers will gather in Prague on Jan. 8, with energy security expected to be a top agenda item.

Middle East relations top foreign policy agenda

Graphic with israeli flag, eu symbol, dove

Fighting in the Middle East continues to concern Europe

Topping the foreign policy agenda at the start of the year are European efforts to negotiate in the escalating Mideast conflict.

On Sunday Foreign Minister Karel Schwarzenberg is expected to travel to the Middle East to work towards a ceasefire in the Gaza Strip, where Israel has killed nearly 400 people in an offensive it says is intended to stop rocket attacks from Hamas.

"As soon as he (Schwarzenberg) takes over the presidency, he feels it is his duty to fly there and start handling it," a spokesperson for the foreign ministry said.

Schwarzenberg, a close ally of Washington and pro-Israel, defended the strikes. He put the onus of the latest conflict on Hamas and said Israel had the right to defend itself. His position differs sharply from Sarkozy's condemnation of aggression from both sides and calls for an immediate ceasefire.

Focus on the economy

Although the ex-communist state of 10 million people has suffered less than most of the rest of the bloc from plummeting markets, bank bailouts and job losses, the Czech Republic will have to steer the EU through what is becoming the worst economic crisis in decades.

It won't be an easy course, as Prague leaders have derided other EU governments for ramping up state spending with stimulus packages to counter falling private sector growth. The Czechs for their part expect slight growth next year and see unemployment rising to just around 6 percent.

Such a posturing will put them at odds with big euro zone countries that are already fighting recession, or Spain where some economists say unemployment could hit 20 percent.

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