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For weeks now, tensions between the Russian Federation and Georgia have been rising. After four Russian citizens were charged with spying in Georgia earlier this month, Russian President Vladimir Putin turned up the pressure, imposing sanctions against the southern neighbour. Public transport as well as the postal service between the two states has been stopped, and Georgians can not longer get visas or work permits for the Russian Federation. In the two weeks since the sanctions were imposed, Russia has deported 700 Georgians and closed dozens

In Business News: the European Commission warns that the aging population will have a considerable impact on Czech GDP growth; the anti-monopoly office hands down the highest ever fine to a state body, after the Labour Ministry awards a contract without a tender; Czech mortgage and home-building savings loans increase ten times in seven years; sales of second-hand cars rise by over 20 percent; and the diplomats may be at loggerheads but trade between the Czech Republic and Cuba rises considerably.

When the former Social Democrat government introduced European Union food hygiene guidelines none protested more loudly than Czech pub owners. They said the strict new standards would bring them to bankruptcy and the ban on serving cooked food which was two days old interfered with the country's "traditions". The Civic Democratic Party - critical of what it called "the government's conformist attitude" towards EU rules and regulations - promised to change things when it came to power. It is now making good that promise. But will the government's

New figures released by the EU statistics office Eurostat this week show that the Czech Republic attracted 8.8 billion euros in foreign direct investment (FDI) last year. This is 5.2 billion euros more than two years previously and higher than foreign direct investment in any other new EU member state. Overall, the Czech Republic ranked eighth among the Union's 25 members.

The European Commission launched proceedings against eight members on Thursday for failing to say how many gas emissions permits they would give polluters under the EU's emission trading scheme. The EC said it was sending warning letters to Austria, Czech Republic, Denmark, Hungary, Italy, Portugal, Slovenia and Spain for ignoring an end June deadline to reveal their plans. The plans are supposed to set the total number of emissions allowances governments will give to industrial plants during the 2008-2012 period under the EU's innovative emissions trading scheme. The quotas are the cornerstone of the landmark trading scheme which was launched at the beginning of 2005 to help member states meet their greenhouse gas emissions targets under the Kyoto Protocol.

The European Commission has issued a final warning to three countries, including the Czech Republic, over their failure to respect the EU's directive banning tobacco advertisements. The EC is taking Italy to the European Court of Justice in this matter, after the country failed to harmonise its legislation with EU rules. The Czech Republic could be taken to court, too, if it does not explain to the EC why it does not follow the common directives. Apart from the Czechs, a similar problem is faced by Spain and Hungary.

Reacting to Tuesday's arrest of three men suspected of corruption and illegally siphoning monies from European Structural Funds projects, the Minister for Regional Development, Petr Gandalovic, has temporarily suspended all projects that fall under the category of the Joint Regional Operation Program (SROP). The announcement came Wednesday afternoon, and Mr. Gandalovic told reporters that the ministry wants to conduct an audit on all projects which started in December 2004 or later, and that this should happen as quickly as possible.

On Tuesday the unit investigating organized crime in the Czech Republic arrested Zdenek Dolezel, Ladislav Peta and Miloslav Rehulka on suspicion of illegal practices concerning EU Structural Funds. The Social Democratic ex-minister for regional development, Radek Martinek, told the press that there are additional cases of suspected fraud. The Social Democratic leadership has distanced itself from the affair, saying it's a question of individuals failing, and has no reflection on the party.

A plan just released by the Agriculture Ministry specifies some 200 locations around the Czech Republic where dams could be built in the future. The document has alarmed the local authorities in many villages around the country which would be affected by future dam construction. Those opposed to the large dam-building project have wasted no time in getting organised and are planning to fight it at the highest level.

The Czech Republic will have to pay the EU a 150 million crown fine ( 5,13 million euros) for exceeding the annual milk quota set by the EC. A spokesman for the European Commission said Czech dairy farmers had exceeded the limit by 17,000 tons. Eight other EU countries will have to pay similar penalties - altogether to the tune of 377 million euros.

The presidents of the four Visegrad Group countries - Poland, Hungary, Slovakia, and the Czech Republic - met for their annual meeting at Lany Chateau, west of Prague, this weekend. The group was formed after the fall of the countries' communist regimes in order to increase their strength on the international stage. Since their accession to NATO and the European Union, however, many have questioned the need for such an alliance today. But after their meeting near Prague, the countries' presidents now say the group has regained impetus. Dita Asiedu