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Brussels, 27 February 2008

State aid: Commission closes investigation into financing of Flemish public service broadcaster VRT

The European Commission has closed its investigation under EC Treaty state aid rules into the financing regime for VRT, the public service broadcaster in the Flemish community of Belgium in light of formal commitments by the Belgian authorities to amend the current regime. The modifications will clarify inter alia the definition and entrustment of the public service remit and introduce mechanisms to ensure the proportionality of the public funding. The Commission has concluded that these commitments would be suitable to ensure compliance with EU state aid rules. Belgium now has twelve months to implement the commitments.

Competition Commissioner Neelie Kroes commented: “I am pleased by the outcome of the co-operation between Belgium and the Commission. The new system will provide more transparency, proportionality and accountability and public funding will be limited to what is necessary for VRT to fulfil its public service mission without adverse effects on competition.”

In 2004, the Commission received complaints against various aspects of the financing regime for VRT (Vlaamse Radio- en Televisieomroep). Private competitors argued that there was no proportionate relationship between the public funding VRT receives for the fulfilment of its public service tasks and the net costs of carrying out these tasks. The complainants also claimed that the definition of the public service remit was not sufficiently precise and that there were no effective control mechanisms.

In July 2006 the Commission initiated a preliminary investigation and requested Belgium to clarify a number of points, in particular concerning the definition of the public service remit, including its relation to new media services, the effective supervision and control of VRT´s fulfilment of its public service obligations as well as the prevention of overcompensation for public services activities (see IP/06/1043).

The Belgian authorities have submitted a number of commitments to allay the Commission's concerns. The proposed amendments aim to more clearly define what the public service remit is and an appropriate entrustment of VRT to fulfil public service tasks. The public service character of new services not covered by the current management contract, will be subject to an 'ex ante' evaluation involving an independent advisory body and third parties, and lead to a proper entrustment of the new activities.

A Framework for merchandising and related activities will also help to clarify which services are commercial and therefore outside the public service remit. The fulfilment of the public service obligations will be supervised by an independent body. A public consultation on VRT's public service remit will be carried out every five years, before a new management contract is signed between the Flemish Government and VRT. Moreover, corrective measures, aimed at ensuring that the state financing does not exceed what is necessary to fulfil the public service mission will be introduced or strengthened, including an adequate control of possible overcompensation.

Belgium now has 12 months to implement the proposed amendments. The Commission will monitor the implementation of the commitments at national level.

The non-confidential version of the decision will be made available under the case number E 8/2006 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.

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