Spain has assumed the rotating European Union presidency with a spectacular light show in Madrid.

Lights forming flags of all 27 EU members lit up a government building at midnight local time to mark both the start of the new year and the Spanish presidency.

Spanish Prime Minister Jose Luis Rodriguez Zapatero has said the European economy will be his priority during the six month-long presidency.

The prime minister said tackling Europe's economic woes must be done in a coordinated and sustainable way, with job creation a major goal.

He also said improving the supervision of financial institutions is essential, saying the lack of regulation was largely responsible for the global recession.

Mr. Zapatero said the EU must continue as a leader in the fight against global warning and protecting the rights of all its citizens.

The prime minister said he believes the new European Union treaty, which took effect on December first, will make the bloc more dynamic.

The treaty is aimed at streamlining EU decision-making and giving it a stronger, more unified role in foreign affairs.

Some information for this report was provided by AFP.