It says in the manual that i can send 3 kinds of gifts to other nations. I haven't been able to figure out how as it is not listed in the diplomacy screen. Could someone please explain to me how?
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It is listed. You have to have a Diplomat available and click on the nation you want to be nice to.
Click on relation/alliances at the top left and options will apear.
Click on relation/alliances at the top left and options will apear.
hehe thanks, I've been playing this game a couple of weeks now, but could never figure it out. I must be quite blind.....
You aren't blind. A few weeks of EU is just beginning. Welcome to the maddness! 
A few notes on gifts:
Your monarch's diplomatic rating will have a large impact on the improvement in relations. (A low rating may even hurt relations, so be careful).
Sometimes 1 gift of state=+15 in relations. While the very next gift=+100 in relations. It's strange.
It's always good to send letters of introduction to your allies...from time to time. Keep an eye on your relations. They will slip (depending on many factors such as your BB rating (for more one the BB see the FAQ) and your religious tollerance.
A few notes on gifts:
Your monarch's diplomatic rating will have a large impact on the improvement in relations. (A low rating may even hurt relations, so be careful).
Sometimes 1 gift of state=+15 in relations. While the very next gift=+100 in relations. It's strange.
It's always good to send letters of introduction to your allies...from time to time. Keep an eye on your relations. They will slip (depending on many factors such as your BB rating (for more one the BB see the FAQ) and your religious tollerance.
Another thing to be careful is competing against another country's merchants. I was busy trying to improve relations with Iraq at the same time I was ruthlessly driving them out of Istaphan. Took me the longest time to figure out why my relations kept dropping.