On New Year's Day, 1 January 2008, the presidency of the European Union will pass for the first time ever to one of the so-called "new member-states" from central and eastern Europe - specifically from the Balkans. Slovenia takes over the running of the EU affairs until 30 June 2008 when the baton passes to France. The Slovenian presidency comes at a critical time in the affairs of the union, on the heels of the Lisbon agreement in December to sign the reform treaty, as the economic clouds gather across the globe and as Kosovo - and the Balkans regions generally - confronts the EU with some daunting challenges.

John Palmer is a member of the governing board of the European Policy Centre Among John Palmer's articles in openDemocracy:
"Europe's enlargement problem" (23 May 2006)
"Europe's foreign policy: saying ‘no' to the US?" (12 September 2006) "
A commonwealth for Europe" (11 October 2006)
"Europe won't go away" (6 February 2007) "From Berlin to Lisbon: the European Union back on the road" (27 March 2007)
"Europe: the square root of no" (20 June 2007)
"Europe's next steps" (26 June 2007) "Europe's higher ground" (22 October 2007)

Slovenia, one of the most beautiful as well as one of the smallest of the union's member-states, does indeed do much to live up to the stereotype of "Europe's best-kept secret". Yet its size no more than its many other qualities should be no great disadvantage in the political arena: history shows that most of the successful EU presidencies have been run by smaller states (think of Ireland, Luxembourg or Finland). Medium-sized Portugal completes its six-month tenure as president on 31 December 2007 to widespread appreciation of its efforts in securing agreement on the reform treaty. By the same measure, some of the biggest failures in running EU affairs have been when the "big" countries (in supposed political weight as well as population) have been in charge.

Slovenia is running one of the most successful economies in the EU and has just joined the single currency euro-group at the heart of the European integration process. Nor is it widely known that Slovenia is unique among the newer member-states in having higher environmental standards than the older EU countries when it joined. Although critics note the rather introverted nature of the domestic Slovene political debate, there is overwhelming public support for the government's strongly pro-EU orientation.

Now that the treaty has been agreed, the Slovenes will have to oversee the start of the ratification process in the twenty-seven member-states. Lithuania or Slovakia seems likely to be the first, but by summer 2008 it may be that a clear majority of states - even including the United Kingdom - will have approved the treaty. If anything does go wrong the government in Ljubljana will have a real crisis on its hands.

The Kosovo conundrum

That said, the main preoccupation of the Slovenes will be nearer home. The Slovenian presidency will be responsible for leading the delicate negotiations for the expected declaration of independence by Kosovo in spring 2008. In an effort to defuse any confrontation with Belgrade, the Slovenes have been authorised to offer Serbia (and Bosnia) an accelerated path to eventual EU membership. Croatia is currently well ahead of all the other former Yugoslav republics, with Macedonia and Montenegro some way behind.

Much will depend on the outcome of the Serbian general election in February 2008. If the nationalists and the far-right Radical Party maintain their deadly grip on Serbian politics, the outlook does not look promising. But if the reformers emerge clearly victorious and ensure that indicted war criminals such as Ratko Mladic and Radovan Karadzic are handed over to the international war-crimes tribunal (ICTY) in The Hague, then the way could be clear for the enlargement of the EU to include the western Balkan states by around 2015. The irony is that this approach also offers the best guarantee that the new borders dividing the former Yugoslavia will disappear when these countries join the EU.

openDemocracy writers track the European Union in a decisive year:
Aurore Wanlin, "The European Union at fifty: a second life" (15 March 2007)
Krzysztof Bobinski, "European unity: reality and myth" (21 March 2007)
Frank Vibert, "The European Union in 2057" (22 March 2057) George Schőpflin, "The European Union's troubled birthday" (23 March 2007)
Simon Berlaymont, "Tony Blair and Europe" (30 May 2007)
Kalypso Nicolaïdis & Philippe Herzog, "Europe at fifty: towards a new single act" (21 June 2007)
John Palmer, "Europe's next steps" (26 June 2007)
Krzysztof Bobinski, "The Polish confusion" (28 June 2007)
Michael Bruter, "European Union: from backdoor to front" (3 July 2007)
Olaf Cramme, "Europe: politics or die" (17 September 2007)
Kalypso Nicolaïdis & Simone Bunse, "The ‘European Union presidency': a practical compromise" (10 October 2007)
Katinka Barysch & Hugo Brady, "Europe's "reform treaty": ends and beginnings" (18 October 2007)

Unfortunately, EU governments are not entirely of one mind. Cyprus, Slovakia and Spain have reservations about recognising Kosovo's declaration of independence, lest this encourage "separatists" elsewhere and encourage Vladimir Putin's Russia to encourage minority enclaves in Georgia and Moldova to breakaway. However Kosovo's, independence both looks inevitable and will also be heavily supervised by the EU (not least to ensure the rights of the remaining Serb minority in Kosovo). A consolidated EU peacekeeping force is already on its way to Kosovo.

The global outlook

The EU presidency will also have to closely monitor the current global banking and financial crisis over the next six months. On 13-14 March 2008, EU heads of government will hold a special summit meeting dedicated to the related challenges of economic globalisation, climate change and structural economic reform. All of these factors - together with the shift of economic power to Asia and the possibility of a protracted period of slow economic growth (possibly even recession) - may force the EU into a root-and-branch review of its overall economic strategy.

At the same time Europe's vulnerability to an energy crisis must also be factored into any new strategy. The Slovenian presidency will give priority to finding some solutions for the EU emissions-trading scheme, wider use of renewables, and carbon-capture and storage. They want an agreement on the basic principles for the distribution of effort to be made by each member-state in order to meet the targets which the EU has already set for itself.

It would be a bit much to ask the Slovenian presidency to rethink from scratch how Europe can best balance the demands of growth, social cohesion and sustainable development, and to create new EU benchmarks for future global policy. But one measure of its success by 30 June 2007 will be the extent to which it both accelerates decision-making in these fields and lays the framework for the work which succeeding presidencies must undertake over the next decade.