PRAGUE - At a time when the European Union needs strong leadership, Czech Republic prepares to take over the presidency of the wealthy bloc amid concerns over its abilities to tackle big crises, such as the financial turmoil or a military conflict.

Economic turmoil in Europe is causing growing concern about the Czech Republic's ability to lead the European Union effectively during its six-month presidency starting on Jan. 1.

Some of Prague's partners are worried that, at a time when strong leadership is needed and recession is looming, the EU will be led by a small country that has not ratified the union's reform treaty and has a president who is hostile to the Union.

Having escaped the worst of the financial crisis, the Czech Republic, which has only been in the 27-state union since May 2004, is also at odds with many other member states over economic policy.

"There is a general will be awkward for the EU to have a Czech presidency which is hostile to European integration," said Iain Begg, a professor at the European Institute at the London School of Economics.

"It is around crisis management that the biggest fears arise," he said.

Prague will take over the presidency from France, a traditional EU power that has helped drive the bloc since its creation half a century ago.

Political analysts said small countries can have successful presidencies but it is much easier for a big member state to pull weight on the global scene during a big crisis, such as financial turmoil or a military conflict.

French President Nicolas Sarkozy took credit for defusing the conflict between Russia and Georgia, which agreed an EU-brokered ceasefire after five days of war in August, and has proposed sweeping plans to shield Europe from economic chaos.

"What Sarkozy has managed to do has been to show considerable leadership, whether or not we agree with what he's done," Begg said.

This may be harder to do for a small country that is often outside the West European mainstream and sided with Washington over the Iraq war.

Major tests
During the Czechs' tenure, Europe will make first contact with the new U.S. administration, hold a European Parliament election and possibly seek agreement on climate policy if the EU fails to agree on a deal at a summit next month.

The Czech government wants to focus on the economic crisis, liberalization, energy security and EU expansion to the Balkans.

But the Czech Republic has not suffered a big direct hit from the global financial crisis and, unlike major EU economies, is expected to record reasonable economic growth next year.

Prague has opposed relaxation of fiscal rules and bank rescue packages proposed by other countries to combat the crisis, saying the measures make them more cautious about adopting the euro currency.

The Czechs plan to remain for some years outside the euro zone. This at one point prompted Sarkozy to suggest the powers of the countries using the euro should be increased, a move that could have undermined Prague's presidency.

Former German Foreign Minister Joschka Fischer has regretted the fact that France will be handing over the presidency to the Czech Republic.

Michael Emerson of the Center for European Policy Studies think tank in Brussels said others shared the sense of unease.

"Brussels awaits the Czech presidency with apprehension," he said.

Prague has had mixed success in easing the concerns but did not help its case when it unveiled its presidency slogan: "We will sweeten it for Europe", based on the sugar cube, invented on Czech territory.

In Czech, the phrase could also be understood ironically, as: "Europe, we'll show them!".

The Czech government and some outside observers, such as European Commissioner Guenter Verheugen who used to oversee EU enlargement, say the fears are exaggerated.

"Your country has an effective administrative apparatus and diplomacy. I do not have the slightest doubt the Czech Republic will manage its task," he told the daily Pravo on Wednesday.

The Czechs have had a eurosceptic image largely due to President Vaclav Klaus, a conservative who sees Brussels as a hive of leftists trying to create a European superstate.

Klaus does not have much executive power under the Czech constitution, but he is expected to make his voice heard, especially as he opposes the Lisbon treaty intended to streamline EU decision-making.

Crazy on treaty
"I can go crazy when I hear this government wants to ratify the Lisbon treaty and the climate package," he said in a recent television interview.

Policy under Prime Minister Mirek Topolanek, a right-winger from the Civic Democrat Party Klaus founded, is more pragmatic and less confrontational on EU matters.

He grudgingly backs the Lisbon reform treaty. But a court challenge and Klaus' opposition make ratification in parliament unlikely by the end of this year, making the Czechs one of very few EU members who have not adopted it.

Topolanek also lost a regional election last month, and could fall from his post as party chief and possibly even prime minister, at a Dec. 5-7 congress. The result is widely open.

The turmoil prompted German European parliamentarian Ingo Friedrich to call on the Czechs to swap their presidency with Sweden, which is due to follow in the second half of 2009. Prague has no such plans.