European Commission President Jose Manuel Barroso (L) welcomed by Sweden's PM Fredrik Reinfeldt in front of Stockholm City Hall, 01 Jul 2009 Sweden took over the rotating European Union presidency, Wednesday, following a troubled six-month tenure under the Czech Republic that saw Prague's government collapse. Stockholm faces big challenges ahead - from tackling the economy to climate change.

Analysts are hailing the new Swedish presidency of the European Union as bringing stability to the 27-member bloc in troubled times. The previous Czech presidency was a particularly rocky one, marked by the collapse of Prague's government and internal power divisions - with Czech President Vaclav Klaus a prominent Euroskeptic.

Analyst Philip Whyte, of the Center for European Reform in London, sums up the sentiments of many observers.

"I think the overall assessment of the Czech presidency is that it was a relatively chaotic one, although in fairness to the Czechs, they had a pretty horrible legacy," he said. "They took over from the French and when they took over from the French, the French President Sarkozy almost looked as if he was continuing France's presidency of the EU. It was a difficult transition. And, the Czech presidency was obviously affected by political instability, with the government collapsing."

The Swedes will not have an easy ride. On their plate is the fate of a key EU reform charter, known as the Lisbon Treaty. Irish voters are expected to approve the treaty during a referendum in October, after rejecting it the first time. But, if they reject it a second time, the EU will plunge into crisis.

The bloc is also trying to figure out how to fund ambitious promises to tackle climate change and to coax big carbon-dioxide emitters like the United States and China to make more cuts before a key climate change summit in December.

Whyte says the economic crisis tops the priority list.

"First of all, it's obviously got the economic context and the trouble is the EU presidencies don't really have very much power to deal with that because a lot of the economic instruments are in the hands of national governments," he said.

Still, Whyte believes Sweden will do a good job heading the EU. In addition to having a stable government, Stockholm is known as being consensus-oriented and favoring an outward looking and economically liberal European Union - qualities, he says will be appreciated at the EU headquarters in Brussels.