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Independent Media Council demanded to clear debt before Euronews

06.03.2020, 17:54

The Independent Media Council urged the newly-appointed Prime Minister Denys Shmyhal and the Government to urgently resolve the problem with the debt of the National Public Broadcasting Company of Ukraine to Euronews SA.

Such is the message the Independent Media Council (IMC) addressed to the newly elected government on the suspending the activity of public service broadcasting, as to the statement made public on the IMC website on March 6.

"... addressing cessation of financial pressure on public service broadcasting by wiping off the debt to Euronews and providing full funding for public service broadcasting in the State Budget for 2021 shall be one of the priorities of the newly elected government," the statement reads.

Here is the full text of the appeal:

"The Independent Media Council appeals to the Prime Minister of Ukraine Denys Shmyhal and members of the Government urging to resolve urgently the problem of debt of the state television company to Euronews SA.

Until the debt issue is fully resolved, the Ukrainian public broadcaster will be in limbo, unable to fulfill its mission, and the reform will be slowed down. As it is a matter of the inherited debt of a state-owned television and radio broadcaster, it is within the competence of the government to resolve this issue.

At the end of February 2020, it became known that the State Executive Service had frozen the public broadcaster’s accounts due to the decision of the Supreme Economic Court of September 5, 2017 to repay the debt of the National Public Television and Radio Company of Ukraine, PJSC, , predecessor National public television and radio company of Ukraine on royalties 2013-2014 in the amount of 10 million 591 thousand 224 euros 48 cents.

Cooperation with Euronews SA began on the initiative of the Azarov government in 2010. At that time, the government icharged the State Committee for Television and Radio and NTCU to carry out a legal evaluation of the draft contract and to ensure the conclusion of the said contract with Euronews.

In ordering such an agreement, the Government was to understand the value of such a decision and to provide an annual allocation of EUR 5.5 million in royalties. However, within three years the money for these needs ceased to be allocated, which led to the emergence of debt of the state broadcaster, whose main source of funding was the state budget.

During the process of turning 28 state broadcasters into a public broadcaster, the issue of NTKU's debt has been repeatedly raised, including at the trial, but the solution to this problem has not been found. As a result of such inactivity, 15 million euros of Ukraine's mortgage in the framework of the Eurovision 2017 have been frozen for the third year in the accounts of the Swiss bank.

The Independent Media Council stresses that the existence of public service broadcasting in a democratic society is one of the elements of securing the same democracy. Public broadcasting itself is a benchmark for the entire media market and produces content aimed at diverse segments of the population, which is not done by commercial broadcasters. Since making the first decisions to transform the state broadcasters into a public broadcaster, we have been seeing systematic obstacles to the creation of the Public Broadcasting Company. This is also the same story with the state-owned enterprise Ukrtelefilm, which has frozen the reform for a year, it is also a cutoff, contrary to the Law on Public broadcaster, funding that could not provide an important change in content over two years that would mark the transition from UT-1 to public broadcasting.

Adopting the 2020 budget, which provided 85% of the funding for public service broadcasting, would allow for the first time to significantly change the programming content and face of public service broadcasting, as the lack of content changes has been the subject of constant criticism from both the political community and experts and viewers. However, since the beginning of 2020, there have been some activity that have signs of continuing of financial pressure on the company. Despite the stated amount of UAH 1.7 billion, the main payments are planned for the III-IV quarter, which from the beginning of the year jeopardized the launch of a new season, which requires long and complicated bidding procedures for the purchase of content, formats and for updating material and technical base. And the freezening of the accounts could now lead to a breakdown in the preparation and participation of GO_A gruop in Eurovision contest, a disruption of the broadcast of the Olympic games and all projects that have begun or are scheduled to be launched in 2020. Withdrawing UAH 308 million from the public broadcasting budget (including court fees) is a return to a stage where it will not be possible to upgrade the broadcast network qualitatively and, therefore, undermine the ability of public broadcasting to fulfill its tasks and mission.

2020 is a key moment for in the reform of public service broadcasting. The Government of Ukraine should be aware that the existence of quality "inconvenient public service broadcasting" is actually beneficial to various playors in the political process, including in order to have a quality channel of information on progress of processes in Ukraine, both on the middle or lower level, and on abuse that, for various reasons, may not be accessible by official channels of communication. A quality and properly funded public service broadcaster is a guarantee of quality interaction between the authorities and the population and, ultimately, a change in the culture of interaction between society and government.

That is why resolving the issue of ending the financial pressure on public service broadcasting by solving the issue of debt to Euronews and securing full funding for public service broadcasting in the draft state budget for 2021 should be one of the priorities of the newly elected government.

As IMI reported, on February 28 the Public broadcaster reported that on February 18, the Ministry of Justice of Ukraine opened an enforcement proceeding to recover the debt from the Public bropadcaster in the amount of 10 million 591 thousand 224 euros 48 cents and 73 080 UAH of court fee (totaling 308 million UAH) in favor Euronews Joint Stock Company.

Minister of Culture, Youth and Sports Volodymyr Borodyanskyi informed that the department together with the Ministry of Finance would provide funds for immediate repayment of NPTU's debts to Euronews from the NPTU budget, and then they would initiate an increase of Public broadcaster’s funding by this amount.

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