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Czech Prime Minister Jiri Paroubek has revealed that the Czech Republic has backed down from its earlier demand for a stronger directive on the liberalisation of trade in services in the European Union. Speaking at a press conference in Brussels on Friday, the prime minister said that it was necessary to find a compromise on the issue. Czech representatives in the end backed Germany, France and the majority of EU countries on the European Parliament's much adapted proposal, lacking the previous "country-of-origin" clause. Countries like Hungary, Latvia, and the Netherlands were against.

The original clause would have allowed individuals as well as companies to provide services throughout the EU using the laws and regulations of their home country. The Czech Chamber of Commerce has already suggested that without it, any new directive will have little economic effect.

An arbitral tribunal in London ruled on Friday that the Czech Republic had "breached its obligation to treat foreign investors fairly and equitably" by failing to protect the investment of the Japanese bank Nomura in the Czech bank IPB. The ruling opens the way for Nomura to seek compensation from the Czech government for the losses it suffered after the bank collapsed in the year 2000. The arbiters have yet to decide how much the Czech state has to pay, but the verdict could be bad news for the ruling Social Democrats ahead of the June general

Financial incompetence has been a perennial theme in the Czech Republic in the 16 years since the fall of Communism. The latest news - splashed over the front pages this morning - suggests that little has changed. According to new statistics released by the European Commission, the Czech Republic has little idea how to access the billions of euros allocated to the country by the EU.

The European Union has agreed to introduce a temporary sugar quota cut for the 2006/2007 season. Fearing a sugar surplus, the European Commission proposed to reduce the production quota by 2.5 million tonnes. In the Czech Republic, this will reduce production from close to 455,000 tonnes to 411,332 tonnes.

On Tuesday the Prime Minister Jiri Paroubek promised that the Czech standard of living would reach the average of the EU 25 in just seven years. He attributes this to his government's policies, with attractive investment incentives, an improving transport infrastructure, and efficient use of the EU's structural and cohesion funds. Statistics show growth rates that most of the old EU members could only dream of, but is Mr Paroubek's prognosis realistic?

The Foundation for the Development of Civil Society has around 1.5 million euros at its disposal to finance projects from non-profit organisations. The grant is from the European Union's Transition Facility programme and can be used to finance any projects that are limited to one year and focus on one of a selection of topics. These include the fight against corruption or discrimination, and the protection of the environment or the consumer. The individual grant cannot exceed 50,000 euros. More information: www.nros.cz

Up to 1,000 civil servants may receive free French lessons to prepare for the country's EU presidency. The Czech government is currently in talks with the French embassy and cultural institute in Prague. The Czech Republic takes up EU presidency in 2009, and the country's officials will be expected to communicate in French and English. Classes are scheduled to begin this year. The British Council has already contributed one million crowns to the opening of a centre, where civil servants can brush up on their English.

When the Czech Republic joined the European Union on May 1st, 2004, the doors to European Structural Funds opened. The money allotted to the Czech Republic for projects in the 2004 - 2006 period stands at nearly 457 million Euros, or roughly 14-and-a-half billion Czech crowns. No small potatoes. One of the key elements of Brussels' strategy is to promote life-long learning in order to increase citizens' chances of employment. In concrete terms, the political aim of the European Union is to eliminate marked economic and social differences within

Britain's EU commissioner for trade, Peter Mandelson, came to Prague on Tuesday to hold a speech at an international business conference. Before the event, Mr Mandelson met members of the Czech government to discuss - above all - economic issues.

The Czech Republic says it will probably not veto a European Union-wide sales tax, raising chances that a row between some new member states and the older members could be resolved. The Czech Republic, Poland and Cyprus had come out against an agreement that would allow value added tax on some services in several member states to be kept below EU norms. They said the plan, put forward by Austria, discriminated against newcomers, which have cut-off dates to abolish tax breaks and meet higher rates in line with EU requirements.