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This report contains results from the first two years of the project "Representation of the seasonal hydrological cycle in climate and weather prediction models in West Europe", NRP project 951246. Its two main objectives are: 1)To understand the causes of excessive drying over the European continental area in the large scale climate and weather forecast models 2) To improve the representation of the seasonal hydrological cycle in climate and weather prediction models. The report reviews existing studies showing that the land surface can be an important factor in determining weather and climate. A particularly important role plays soil moisture, because it acts as a long term memory to the system. Analysis is based around the national Regional Atmospheric Climate Model (RAMCO). The evaluation of the RAMCO Land Surface Model indicated that the introduction of site specific parameters has a significant effect on simulated water budgets. This study also shows that implementation of all site specific information in RAMCO does not automatically lead to the best performance. Thus, the interaction between different aspects of the LSM stresses the need for careful analysis of future model adjustments, both off-line and coupled to the atmospheric model.