Portugal's EU Presidency

Germany handed over the rotating six-month EU council presidency to Portugal on Saturaday, July 30. Portugal's main task will be to finalize the treaty work started by the larger, wealthier fellow EU member state.

In June, German Chancellor Angela Merkel negotiated a revamped EU treaty after a tortuous summit which allowed the EU to preserve elements of the European constitution rejected by French and Dutch voters in 2005.

Socrates said he wants to "keep up the momentum of the agreement reached in Brussels and to approve a new treaty for the European Union as quickly as possible."

Treaty trouble

As long as the treaty doesn't fall apart, Portugal's presidency will be seen as a success, said Sebastian Kurpas, an EU expert at the Center for European Policy Studies (CEPS.) But the treaty is by no means a done deal. The process could become political, with countries trying to wiggle their way out of already-agreed-upon issues.

"The risk is that here and there countries will disagree again," Kurpas said. "I think it's a challenge."

There are signs it may be already happening. On Friday, Poland's prime minister Jaroslaw Kaczynski made EU officials nervous when he said he wanted to "fine tune the deal" to ensure Poland gets concessions on voting rights.

Socrates said he didn't think Poland means to re-open debate on the issue.

"I was present at the summit and know what was agreed," Socrates said. "The mandate is very clear and precise on what has to be done. I am sure this is only a misunderstanding."

Socrates acknowledged at a recent speech in Lisbon that it's Portugal's job to finalize the agreement, which he predicted will be "demanding, intensive and complex."

"We must be ready for the problems that can arise and which so often become apparent as we enter the home straits of the negotiation process," Socrates said.

Tough reformer

In Portugal, Socrates has fashioned himself as a politician who makes difficult decisions and isn't afraid to pass measures that are controversial or painful.

Public opinion in Portugal is split on the job Socrates has done since his center-left Socialist Party won an absolute parliamentary majority in 2005. The government inherited a budget deficit that was 6.8 percent of the country's gross domestic product, the Euro zone’s highest. The deficit has become "the paramount issue in Portuguese politics," said Pedro Magalhaes, a political scientist at the University of Lisbon.

To reduce the deficit, the government has slashed spending and has launched major reforms of the public sector and of social security.

"From a country notable for a total absence of reform, we have become one of Europe's top reformers and will continue to implement daring structural reforms," Socrates said in an interview with the Financial Times last year.

While opinion polls show many of Portuguese believe sacrifice is necessary to reduce the deficit, "two years have passed, people are waiting for results," Magalhaes said. "They feel the consequences of this economic stagnation."

Public sector wages have largely been frozen and unemployment in Portugal is high. Educational reforms have angered the powerful teachers union.

Focusing on Europe

Several recent controversies have also hurt the 49-year-old divorcee's poll ratings. He was recently accused of improperly being awarded a university degree. He's also been seen as using his influence to stifle opposition. Within Portugal, he's in danger of being viewed as a "democratic dictator," Magalhaes said.

"There’s sort of a tipping point where authoritative becomes authoritarian," he said. "We’re around that tipping point."

Yet Socrates will likely get a break from domestic worries during his presidency. The center-right opposition, the Social Democratic Party, is very pro-European and will likely became less antagonistic and critical as Socrates focuses on EU issues.

"They don’t want to be perceived as creating difficulties for the role this government will have in the EU in the next six months," Magalhaes said.

Most countries view the EU presidency as a time to focus additional attention on their country.

"For the political leadership of the country it’s a great opportunity to give itself visibility on an international stage," said EU policy expert Kurpas.

Bigger isn't always better

The Portuguese presidency looks like it will be different from Germany's tenure. Germany designed a no-frills Web site heavy on press releases and civics lessons for its EU presidency. Click over to Portugal and visitors are greeted by ambient music and a kaleidoscope of flags.

While larger countries often have more control over the EU agenda, being a small nation also has advantages for the presidency, experts say.

Large countries often find themselves in the awkward position of negotiating EU issues in which their country has strong national interests. Portugal will be able to act more as a neutral broker in the big issues facing Europe.

"It's a huge learning experience," Kurpas said. "It's intense, especially for smaller countries, this means a lot of resources are going into European issues. I think it's a major effort."