Chancellor Wolfgang Schuessel will hope to revive growth in western Europe and continue EU enlargement, forge ahead with the EU constitution and win over a European parliament to approve the bloc’s 2007-13 budget during the six-month presidency.

But his agenda will be swayed by an Austrian general election in the second half of 2006, voters who have become the most euro-sceptical in the EU and a split coalition partner that may try to cash in on anti-EU rhetoric.

"We won’t create a new Europe in the next six months," Schuessel said in a recent interview. "We will continue to work and provide a service for Europe."

Trying to stick to feelgood topics, Schuessel has made it clear that he will not go out of his way to deal with tasks high on the EU’s agenda but unpopular at home.

"The EU only has an impact (on domestic popularity) if things go wrong. If they go well, nobody cares," said Peter Hajek, analyst at pollster OGM.

Polls show Austrian voters have become even more dismissive of the EU than the British, partly over fears of losing jobs to eastern European neighbors. Less than a third of Austrians now say the EU membership gained in 1995 was a good thing. Less than a quarter have a generally positive image of the bloc.

GROWTH PRIORITY

One of Austria’s goals — to promote economic growth and employment — will be the top item of a summit in March, where EU leaders must approve national action plans due to be proposed by the European Commission in January.

But Schuessel is focusing on parts of the plan that mean higher spending on research and infrastructure, while distancing himself from a drive for more economic liberalization.

"You can’t always say, ‘ever more competition, ever more liberalization’," Schuessel said.

He wants the Commission to redraft a proposed law to open up cross-border competition in the services sector. The Commission sees this as key to boosting growth but Austria fears "wage dumping" by cheaper labor from new EU countries.

Schuessel’s stance has left supporters of the services directive with little expectation Austria can speed up the process. They are pinning their hopes on more business-friendly Finland, which assumes the EU presidency in July.

Trickier for Austria, Foreign Minister Ursula Plassnik will preside over a decision whether detailed membership negotiations with Turkey and Croatia can begin.

According to opinion polls, Austrian voters reject Turkey’s accession by 80 percent, but are friendly towards Croatia, once part of the Austro-Hungarian empire with strong ties to Vienna.

Plassnik pushed through tough criteria for Turkey’s accession in October. Her way of handling the process will be watched at home for any softening of stance — and by proponents of Turkey’s admission for any signs of unfairness.

Linked to enlargement is the need to overhaul creaking EU institutions, one of the main aims of the bloc’s proposed constitution that was rejected by Dutch and French this year.

When asked about the constitution debate, Schuessel and Plassnik have used vague terms referring to the "European way of living" it should reflect among other phrases.

But Austria’s apparent lack of concrete goals may be appropriate as diplomats see no substantial moves on the constitution before 2007, when new French and Dutch governments will have been elected and Germany presides over the EU.