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A new survey by the highly respected Economist Intelligence Unit has placed the Czech Republic among the world's leading democracies. The London-based think tank ranked the Czech Republic in 18th place among an elite group of 28 fully functioning democratic societies. The report was compiled by a group of international experts on the basis of various criteria such as the electoral process, the functioning of government, and political participation. The Czech Republic scored better than many other countries in the region, including Slovakia and Hungary, which the report described as "flawed" democracies.

In Business News: uncertainty remains about when the Czech Republic will introduce the euro, after the government approved an adoption plan - without a target date; the central bank surprised many with a second quarter-point interest rate hike in two months; the average salary was 7.4 percent higher in the second quarter than in the same period in 2006; changes to the labour code are intended to increase flexibility; power giant CEZ hooks up with Hungary's MOL; and Ikea plans to double its regional presence over the next decade.

The Foreign Ministry's annual report on Czech arms exports has come under fire from Amnesty International. The international human rights group says that the Czech Republic exports weapons to counties which violate human rights, and claims that there are no guarantees that the weapons will not end up in a third country on which the UN has placed an arms embargo. We put Amnesty International's points to the director of the foreign ministry's department of common, foreign and security policy Vaclav Balek.

A group of Czech nationalists close to the right-wing National Party will be demonstrating against the alleged "Islamization" of Europe in Brussels in September, according to an invitation published on their website. The event will be held by the Stop Islamization of Europe initiative that expects nationalists from other European countries to participate as well.

Vladimir Dlouhy, a former Czech minister of industry and trade, has rejected an offer to become the Czech ambassador to the European Union in Brussels next year. The Czech government wants to dismiss the present ambassador Jan Kohout to improve communication between the embassy and Prague, only a year before the Czech Republic assumes the EU presidency. Vladimir Dlouhy, who was the most popular Czech politician for most of the 1990s, said on Sunday that he was too busy to accept the post. After Dlouhy left politics in 1998, he started pursuing an academic career.

The European Commission has formally accepted a Czech national plan to draw on EU funds in the period 2007 to 2013. Friday's agreement brings to an end months of negotiations. However, the actual drawing of EU money requires European Commission approval of 24 individual Czech programmes focused on various sectors; that process should begin at the end of September and come to a conclusion next year.

Speaking in Brussels on Friday, the Czech minister for regional development, Jiri Cunek, said the country could already be making use of the EU funding, if it had not been for delays caused by the previous government and the stalemate which followed elections last June.

Czech newspaper Lidove Noviny has reported that Vladimir Dlouhy - a former trade and industry minister, as well as former deputy chairman of the Civic Democratic Alliance - could replace Jan Kohout in the post of Czech ambassador to the European Union. The government said this week it wanted to replace Mr Kohout before his mandate officially expired in May. It said this was in order to give his successor more time in the job before the country takes up the six month EU presidency in January 2009. According to Lidove Noviny, Vladimir Dlouhy has already received the offer and has until the end of the week to reach a decision. By comparison, Internet server Euro on Thursday downplayed the likelihood of Mr Dlouhy getting the job, saying he was on vacation until August.

There are still more than seventeen months to go before the Czech Republic takes over the helm of the European Union, but feverish preparations are already underway and they could see the country's top EU diplomat coming home five months early. The move has been criticised by the opposition, which accuses the centre-right government of playing politics.

The Czech ambassador to the European Union Jan Kohout will be replaced before his term ends in May next year, Lidove noviny reported. The government wants to find a new ambassador to Brussels for the important period before the Czech Republic assumes the rotating presidency of the EU in the first half of 2009, the daily said. It is not yet clear who will succeed Mr Kohout in the post.

The opposition Social Democrats have spoken out against the move, accusing the government of conducting a 'political purge'.

For the first six months of 2009, the Czech Republic will be the second new EU member after Slovenia to hold the rotating presidency of the European Union. But that may not be the only prestigious function filled by the country in that period - Prague is also hoping to secure one of the non-permanent positions on the United Nations Security Council from 2008.