The EU has been playing musical chairs and Portugal, which last held the presidency in 2000 when it gave us the Lisbon Agenda, is in the hot-seat again

The Lisbon Agenda set the EU the task of becoming the world's most competitive and dynamic knowledge-based economy by 2010, sustaining economic growth with more and better jobs and greater social cohesion.

After seven years of foot-dragging, it is safe to say that these targets were overambitious. Europe's economies have improved, but the upturns have not been accompanied by the reforms Lisbon intended.

This time around, the Portuguese plan to launch a debate on strengthening small and medium-sized enterprises (SMEs) and improving their access to finance. But is Portugal in a position to lead such a debate and, in light of the EU's record of broken promises, should we take any notice?

Each incoming presidency refers to the importance of SME policy, but it rarely tallies with what we, in the UK, think needs to be done. Portugal's move could be the exception. A presidency's domestic commitment to an issue is a sign of how much it might push that agenda. In this case, the omens are good. Portugal has done much to improve the lot of its small businesses—indeed, minimal regulation makes it theoretically possible to set up a new business in just one hour.

Portuguese SMEs rely on a genuine support network, which offers advice on minimising bureaucracy and serves as a focal point for the many funding and support schemes open to businesses. In short, the Portuguese practice what they preach. It's a pity, then, that the presidency's energies will be used up in the area of constitutional reform when there's so much to do to make the EU competitive.

It says a lot about the EU that instead of assessing the Lisbon Agenda's progress and driving forward competition, discussions will focus on voting weights, rotating seats, charter rights and other issues that won't change the fact that in competitive terms, Europe is being overtaken by China and India.