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EU: Change state funding

EC demands future grants be more accountable

BRUSSELS — A double-edged European Union judgment has approved state aid provided by Italy and Portugal to pubcasters in the 1990s but demanded that future funding be more accountable.

The European Commission judged that two grants by the Italian government to RAI in 1992 and 1995 did not distort competition in commercial markets such as advertising and therefore did not constitute illegal state aid.

A similar ruling was handed down in the case of nine payments made by the Portuguese government to Radio Televisco Portugesa.

The Italian judgment ordered the government to change the license fee mechanism for public service broadcasting to ensure financial transparency and establish a clearer delineation between money spent on pubcasters and that on commercial programming.

It also recommended that the EU be notified of any new aid.

In the Portuguese case, it recommended that the annual payments be made more transparent to avoid overcompensating for shortfalls in the license fee.

Ross Biggam of the Assn. of Commercial Television in Europe counseled against interpreting the decision as a greenlight for state aid. “This decision is far from clear-cut,” he said.

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