Proposal for a COUNCIL DECISION concerning the Community position within the Association Council on the participation of Bulgaria in a Community programme within the framework of Community audiovisual policy

(presented by the Commission)

EXPLANATORY MEMORANDUM

On several occasions, the European Council has recognised the opening up of Community programmes to the participation of the candidate countries of Central Europe as an important step forward in their preparation for accession.

The European Council held in Luxembourg in December 1997 re-iterated the importance of the participation of candidate countries in Community programmes, in line with their progressive adoption of the acquis.

After a set of Association Council Decisions establishing, in accordance with the relevant Additional Protocols to their Europe Agreements, conditions for the participation of all candidate countries of Central Europe in many Community programmes in a variety of fields, it is now proposed to open up the MEDIA II programme for the participation of Bulgaria in 2000.

So far, on the basis of extensive exploratory discussions with all these countries since 1996, Bulgaria is considered to be the candidate country of Central Europe which comes closest to meeting the legislative requirements defined by the Community's audiovisual policy.

The specificity of Community audiovisual policy, which is made up of complementary objectives and elements, requires a high degree of legislative alignment with Council Directive 89/552/EEC as amended by European Parliament and Council Directive 97/36/EC (Television Without Frontiers), before participation of a candidate country in MEDIA II can be considered. The MEDIA II Programme and the Television Without Frontiers Directive share certain common objectives - the creation of a European audiovisual area and the support of European audiovisual production and distribution. To participate in the financial support programme without aligning legislative arrangements could be discriminatory and, in any event, counterproductive. Moreover Article 92(2) of the Europe Agreement stipulates that "The Parties shall co-ordinate and, where appropriate, harmonise their policies regarding the regulation of cross-border broadcasting, technical norms in the audiovisual field and the promotion of European audiovisual technology." While complete approximation with the audiovisual acquis is not expected at the moment of their participation in MEDIA II, candidate countries of Central Europe wishing to participate in the programme must demonstrate that the course of legislative alignment is moving in parallel to their participation in MEDIA II.

Work as regards legislative alignment with the Television Without Frontiers Directive has been ongoing since 1995 in each candidate country. The principles and objectives of Community audiovisual policy have been presented and explained in detail in Brussels and in each candidate country of Central Europe, and information exchange on this subject has taken place in Cyprus and Malta.. As participation in Community programmes increased in importance in the context of pre-accession, the relevant Commission services have intensified efforts as regards encouraging legislative alignment in order that participation in MEDIA II can proceed. Projects for amending broadcasting laws are now being discussed in most of these countries. The Commission will continue and increase its advice and information provision over the coming months in order to assist the other candidate countries of Central Europe in their preparation for participation in MEDIA II.

In addition to the required legislative alignment, Bulgaria, according to Article 3 of the Additional Protocol, will meet the cost resulting from its participation; it is, however, entitled to use part of its National Phare Programme for complementing the contribution from its own budget. Bulgaria has confirmed to the Commission in writing its willingness to participate in MEDIA II in 2000 and to make available the necessary budgetary appropriations, as calculated by the Commission services. It envisages paying 7 % of its financial contribution (which constitutes the amount of the supplementary costs of an administrative nature) from its national budget and 93 % from its Phare allocation.

A question of particular importance to Bulgaria is the way in which it will be associated to the management and decision making process of the Programme. In the draft Association Council Decision, it is proposed that Bulgaria be closely involved in the monitoring of its participation in the Programme, be invited to co-ordination meetings prior to the meetings of the Management Committee, and informed about its results.

The main issues addressed in the annexed draft Decision of the EU-Bulgaria Association Council adopting the terms and conditions for the participation Bulgaria in the Community programme in the audiovisual field are the following:

- Bulgaria shall participate in all actions of MEDIA II; conditions for submission, assessment and selection of applications will be the same as for the Member States of the Community (Annex I, paragraphs 1 and 2).

-Bulgaria shall set up or make available national structures and mechanisms in order to implement its participation (Annex I, paragraph 3), in particular the establishment of a MEDIA desk.

- the financial contribution of Bulgaria and the rules governing this contribution are defined in Annex I, paragraph 4 and in Annex II.

- Bulgaria shall be associated to the monitoring of its participation in the Programme (Annex I, paragraph 6).

- Bulgaria shall be invited to co-ordination meetings prior to the meetings of the Programme Committee and will be informed about its results (Annex I, paragraph 7)

- the Commission and Bulgaria shall exchange information on, and monitor the progress of legislative alignment in the audiovisual sector, in particular within the framework of the Contact Committee provided for by Directive 89/552/EEC as amended by European Parliament and Council Directive 97/36/EC (Annex I, paragraph 8)

- the Decision shall apply for the duration of the Programme (i.e. 31.12.2000, Article 2 of the Decision).

As aforementioned, Bulgaria comes close to meeting the requirements defined by the Community's audiovisual policy. However, a close and continuous monitoring of legislative changes will be required. In this respect, Bulgaria has indicated that its alignment efforts will continue throughout the course of 2000, in parallel with its participation in the Programme.

The adoption of an Association Council Decision to allow the Republic of Bulgaria, as the first candidate country of Central Europe, to participate in MEDIA II in 2000 will offer this country the opportunity to actively integrate in the Community's audiovisual policy. It is, therefore, of considerable political importance.

Subject to their capacity to fulfil the relevant administrative and budgetary requirements as well as their ability to meet the legislative alignment requirements in the case of MEDIA II, other candidate countries should also be able to join either MEDIA II or subsequent Programmes in this area (e.g. possible MEDIA III) in the future. For the time being only Cyprus participates in MEDIA II. As regards Hungary, corresponding negotiations are under way on the basis of similar provisions to those proposed in the annexed draft Decision.

In order to allow Bulgaria's participation in MEDIA II as from early 2000, the Council is requested to adopt the annexed proposal for a Decision.

2000/0123 (ACC)

Proposal for a COUNCIL DECISION concerning the Community position within the Association Council on the participation of Bulgaria in a Community programme within the framework of Community audiovisual policy

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 150(4) and Article 157(3), in conjunction with Article 300 (2), second sentence of the first paragraph and second paragraph thereof,

Having regard to the proposal from the Commission,

Whereas:

(1) Article 92 (2) of the Europe Agreement stipulates that "The Parties shall co-ordinate and, where appropriate, harmonise their policies regarding the regulation of cross-border broadcasting, technical norms in the audiovisual field and the promotion of European audiovisual technology." In this regard the relevant Community instruments are Directive 89/552/EEC of 3 October 1989 as amended by European Parliament and Council Directive 97/36/EC of 30 June 1997 on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities [1] and Directive 93/83/EEC of 27th September 1993 on the coordination of certain rules concerning copyright and rights related to copyright applicable to satellite broadcasting and cable retransmission [2] . It is particularly important that each State ensures that all broadcasters under its jurisdiction comply with the rules of the system of law applicable to broadcasts intended for the public in that Member State;

[1] OJ L 202 of 30.07.1997

[2] OJ L 248 of 06.10.1993

(2) Article 92 of the Europe Agreement between the European Communities and their Member States, of the one part, and Bulgaria, of the other part, signed in Brussels on 8 March 1993, provides for the possibility for Bulgaria to participate in actions set up in the framework of the MEDIA II Programme;

(3) The Additional Protocol to the Europe Agreement establishing an association between the European Communities and their Member States, of the one part, and Bulgaria, of the other part, has been concluded by Decision of the Council and the Commission of 4 December 1995 [3].

[3] OJ L 317 of 30.12.1995, p.24

(4) According to Article 1 of the Additional Protocol, Bulgaria may participate in Community framework programmes, specific programmes, projects or other actions notably in the audiovisual and cultural fields; pursuant to Article 2, the terms and conditions of Bulgaria in the activities referred to in Article 1 shall be decided by the Association Council;

(5) Council Decision (95/563/EC) of 10 July 1995 on the implementation of a programme encouraging the development and distribution of European audiovisual works and in particular Article 6 thereof [4]and Council Decision (95/564/EC) of 22 December 1995 on the implementation of a training programme for professionals in the European audiovisual programme industry and in particular Article 5 thereof [5] (hereinafter the two together being called "MEDIA II"), provide that these programmes shall be open to the participation of associated Central European countries in accordance with the conditions set out in the Additional Protocols to the Association Agreements on participation in Community programmes;

[4] OJ L321 of 30.12.1995, p.25

[5] OJ L321 of 30.12.1995, p.33

(6) Although Bulgaria has ratified the Council of Europe Convention on Transfrontier Television and will very soon ratify its amending Protocol and has, through the latest amendments to the Radio and Television Law, adopted a number of provisions which bring Bulgaria's broadcasting legislation very close to the Community acquis in this field, some further minor alignment work remains to be done,

HAS DECIDED AS FOLLOWS:

The position to be taken by the Community within the Association Council established by the Europe Agreement between the European Communities and their Member States, of the one part, and Bulgaria, of the other part, concerning the participation of Bulgaria in a Community Programme within the framework of Community audiovisual policy is the attached draft decision of the Association Council.

Done at Brussels,

For the Council

The President

Draft DECISION OF THE EC-BULGARIA ASSOCIATION COUNCIL adopting the terms and conditions for the participation of Bulgaria in a Community Programme within the framework of Community audiovisual policy

THE ASSOCIATION COUNCIL

Having regard to the Europe Agreement establishing an association between the European Communities and their Member States, of the one part, and Bulgaria of the other, and in particular Articles 92 and 98 thereof, [6]

[6] OJ L 358 of 31.12.1994, p. 94.

Having regard to the Additional Protocol to the Europe Agreement establishing an association between the European Communities and their Member States, of the one part, and Bulgaria, of the other part concerning Bulgaria's participation in Community programmes, and in particular Article 1 and 2 thereof, [7]

[7] OJ L 317 of 30.12.1995, p. 95.

Whereas according to Article 1 of the Additional Protocol, Bulgaria may participate in Community framework programmes, specific programmes, projects or other actions notably in the fields of audiovisual and culture,

Whereas pursuant to Article 2 of the said Additional Protocol the terms and conditions for the participation of Bulgaria in the activities referred to in Article 1 shall be decided by the Association Council,

HAS DECIDED AS FOLLOWS:

Article 1

Bulgaria shall participate in the European Community Programme Media II according to the terms and conditions set out in Annexes I and II which form an integral part of this Decision.

Article 2

This decision shall apply until 31 December 2000.

Article 3

This Decision shall enter into force on the first day of the month following its adoption.

Done at Brussels,

For the Association Council

The Chairman

ANNEX I

Terms and conditions for the participation of Bulgaria in the MEDIA II Programme

1. Bulgaria shall participate in all actions of the MEDIA II Programme (hereinafter called "the Programme") subject to the following condition:

- adoption of a timetable for the complete alignment of Bulgarian legislation with Directive 89/552/EEC of 3 October 1989 as amended by European Parliament and Council Directive 97/36/EC on the co-ordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities.

Bulgaria's participation in the Programme shall be in conformity, unless otherwise provided in this Decision, with the objectives, criteria, procedures and deadlines as defined in Council Decision (95/563/EC) on the implementation of a programme encouraging the development and distribution of European audiovisual works and Council Decision (95/564/EC) on the implementation of a training programme for professionals in the European audiovisual programme industry.

2. The terms and conditions for the submission, assessment and selection of applications related to eligible institutions, organisations and individuals of Bulgaria shall be the same as those applicable to eligible institutions, organisations and individuals of the Community.

3. In conformity with the terms of the relevant provisions of the Decisions on MEDIA II, Bulgaria shall provide the appropriate structures and mechanisms at national level and shall take all other necessary steps to ensure national co-ordination and organisation of the implementation of the Programme. In particular Bulgaria shall undertake to establish a MEDIA Desk in collaboration with the European Commission.

4. Bulgaria shall pay each year a contribution to the budget of the Community to cover the costs resulting from its participation in the Programme.

The rules governing the financial contribution of Bulgaria shall be those set out in Annex II, which constitutes an integral part of this Decision. The Association Committee shall be entitled to adapt this contribution whenever necessary.

5. The Member States of the Community shall make every effort to facilitate free movement and residence of all eligible persons to the programmes moving between Bulgaria and the Community for the purpose of participating in activities covered by this Decision.

6. Without prejudice to the responsibilities of the European Commission and the Community's Court of Auditors in relation to the monitoring and evaluation of the programmes pursuant to Article 7 and Article 6 of MEDIA II (Development and Distribution), and MEDIA II (Training), respectively, the participation of Bulgaria in the Programme shall be continuously monitored on a partnership basis involving the Commission and Bulgaria. Bulgaria shall submit to the Commission relevant reports and take part in other specific activities set out by the Community to this end.

7. Without prejudice to the procedures referred to in Article 4 (MEDIA II - Training) Article 5 (MEDIA II - Development and Distribution), Bulgaria shall be invited to co-ordination meetings on any question concerning the implementation of this Decision prior to the regular meetings of the Programme Committee. The Commission shall inform Bulgaria about the results of such regular meetings.

8. The Commission and Bulgaria shall exchange information on, and continually monitor the progress of legislative alignment in the audiovisual sector, with particular reference to Directive 89/552/EEC as amended by European Parliament and Council Directive 97/36/EC. Bulgaria shall be invited, where appropriate, to participate in the work of the Contact Committee set up by Directive 97/36/EC.

9. The language to be used as regards the application process, contracts, reports to be submitted and other administrative arrangements for the Programme, shall be one of the official languages of the Community.

ANNEX II

FINANCIAL CONTRIBUTION OF BULGARIA TO MEDIA II.

1. The financial contribution of Bulgaria will cover:

- financial support from the Programme to Bulgarian participants:

- financial support from the Programme to a MEDIA Desk up to 50% of its overall running costs;

- supplementary costs of an administrative nature related to the management of the Programme by the Commission stemming from Bulgaria's participation.

The aggregated amount of the financial support received from the Programme by Bulgarian beneficiaries and by the MEDIA Desk of Bulgaria will not exceed the contribution paid by Bulgaria, after deduction of the supplementary costs of an administrative nature.

2. Bulgaria's annual contribution will be of EURO 334,312 for 2000. From this sum, an amount of EURO 23,402 (7% of the total contribution of EURO 334,312) will cover supplementary costs of an administrative nature related to the management of the Programme by the Commission stemming from Bulgaria's participation.

3. The financial regulation applicable to the general budget of the Community shall apply, notably to the management of the contribution of Bulgaria.

After the entry into force of this Decision, the Commission shall send to Bulgaria a call for funds corresponding to its contribution to the costs under the Decision.

This contribution shall be expressed in EURO and paid into a EURO bank account of the Commission.

Bulgaria shall pay its contribution to the annual costs under this Decision according to the call for funds and at the latest three months after the call for funds is sent. Any delay in the payment of the contribution shall give rise to the payment of interest by Bulgaria on the outstanding amount from the due date. The interest rate corresponds to the rate applied by the European Central Bank, for the month of the due date, for its operations in EURO, increased by 1,5 percentage points.

4. Bulgaria shall pay the supplementary costs of an administrative nature referred to in paragraph 2 from its national budget.

5. For the year 2000, Bulgaria shall pay EURO 23,402 from its national budget (corresponding to the 7% supplementary costs of an administrative nature), and EURO 310,910 from its Phare annual programme subject to regular Phare programming procedures.

FINANCIAL STATEMENT

1. TITLE OF OPERATION

Participation of Bulgaria in the Community Programme Media II

2. BUDGET HEADING INVOLVED

B7-030 Economic Aid to the Associated Countries of Central and Eastern Europe

Budget heading 6091 - Revenue accruing from the participation of the associated countries of Central Europe in community programmes

3. LEGAL BASIS

Treaty establishing the European Community, and in particular Articles 150(4) and 157(3), in conjunction with Article 300 (2), second sentence of the first indent and second indent thereof.

Additional Protocol to the Europe Agreement with Bulgaria of 30 December 1995, providing for the opening-up of Community programmes (OJ No L 317/95, page 24)

Council Decision (95/563/EC) of 10 July 1995 establishing the MEDIA II - Development and Distribution programme, and in particular Article 5, thereof.

Council Decision (95/564/EC) of 22 December 1995 establishing the MEDIA II - Training programme, and in particular Article 6 thereof.

4. DESCRIPTION OF OPERATION:

4.1 General objective

Bulgaria's participation in MEDIA II will assist future accession to the Union, which was the aim set by the Copenhagen European Council of June 1993 and confirmed by subsequent European Councils. Its participation will not only contribute towards the implementation of the provisions relating to economic and cultural cooperation in the Europe Agreements but will also enable Bulgaria to familiarise itself with the procedures and methods used in Community programmes.

The decision making process for the opening-up of programmes involves a decision by the Association Council between the Union and the associated country. This decision also lays down the practical arrangements for opening up the programmes.

The Additional Protocol with Bulgaria entered into force on 1 February 1996 and foresees Bulgaria's participation in programmes in the field of the audiovisual sector.

4.2 Period covered and arrangements for renewal

Until the end of the Community programme concerned, i.e. 31.12.2000.

5. CLASSIFICATION OF EXPENDITURE OR REVENUE

5.1 Non-compulsory expenditure

5.2 Differentiated appropriations

5.3 Type of revenue involved:

Since the first paragraph of Article 3 of the Additional Protocol stipulates that Bulgaria itself will meet the costs resulting from its participation, it will be invited to transfer its total contribution (National Funds and funds originating from Phare contribution) to item 6091 of the EU's budget receipts. However, as the second paragraph of Article 3 states that the Community may supplement Bulgaria's contribution (partly from the National Phare Programme), Bulgaria will contribute only part from its national budget, with the remainder being charged to article B7-030.

6. TYPE OF EXPENDITURE OR REVENUE

- up to 50% loans or subsidies - in some circumstances up to 75% for subsidies

- loans and subsidies for joint financing with other sources in the public and/or private sector

- where the Community contribution is granted in the form of a loan, provision is made for the financial support to be reimbursed under certain conditions

As far as revenue is concerned, provision for Bulgaria's contribution to cover the cost of its participation is made under item 6091. The revenue will be allocated to the items for expenditure on the MEDIA II Programme and, where appropriate, to the relevant items of operating expenditure.

The total revenue expected is given under item 7.3.

7. FINANCIAL IMPACT

7.1 Method of calculating total cost of operation for 2000 financial year (link between individual costs and total cost)

The calculation is based on the following preconditions:

- Bulgaria's contribution to the financing of the activities referred to in the Additional Protocol is calculated according to the principle that the country bears the cost of participation itself. Item 6091 has been created in the statement of budget revenue for that purpose;

- The Community may decide on a case-by-case basis to pay a supplement to the Bulgaria's contribution. The supplement may be in the form of a contribution under the National Phare Programme.

- Based on the Additional Protocol with Bulgaria, the financial and budgetary arrangements for the programme concerned are as follows: the calculation is based on a method using GDP per capita as weighted with PPP (purchasing power parties).

- The cost of Bulgaria's participation in MEDIA II in 2000 will be 334,312 EURO from which the supplementary costs of an administrative nature amounting to 23,402 EURO - to be borne exclusively by Bulgaria - have to be deducted.

- Thus 23,402 EURO will be covered from Bulgaria's national budget and - subject to the Phare procedures for programming article B7-030 - 310,910 EURO from the annual Phare budget for Bulgaria (National Phare Programme)

7.2 Itemised breakdown of cost in EURO

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7.3 Schedule for operations in 2000:

Amounts to be charged to article B7-030

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(*) Schedule based on the method of payment currently applying to these programmes

The foreseeable annual receipts are as follows:

Item 6091 // 2000

Operational costs // 310,910

Supplementary costs of an administrative nature //

23,402

Total // 334,312

8. FRAUD PREVENTION MEASURES; RESULTS OF MEASURES TAKEN

All the Commission's contracts, agreements and other legal commitments provide for on-the-spot checks by the Commission and Court of Auditors. Among other things, the beneficiaries of the operations are obliged to file reports and financial statements. These are analysed from the point of view of their content and their eligibility of the expenditure in line with the objective of Community financing.

The anti-fraud provisions of the basic budget headings apply to this heading too when adapted to the case of the countries of Central Europe.

9. ELEMENTS OF COST-EFFECTIVENESS ANALYSIS

9.1 Specific and quantified objectives; target population

The aim of opening up MEDIA II to Bulgaria is to bring it the same benefits as the Member States of the Community already enjoy from this programme. The essential aim of Community action in the audiovisual field is to adapt the skills and talents of the audiovisual sector to the profound changes occurring in the market and to promote the production and distribution of European audiovisual works.

The principal aim of the MEDIA II programme is to contribute to the training of professionals, the development of production projects and independent production companies as well as the transnational distribution of European works in an effort to achieve significant and more structurally oriented results. The objectives of the programme include the following:

- to improve initial and in particular continuing vocational training for audiovisual professionals, to provide them with the knowledge and skills they need in order to take account of the European and other world markets, by granting subsidies to a number of training initiatives in the field of:

- economic and commercial management, including legal aspects,

- the use and development of new technologies for the production of audiovisual works (including the protection and enhancement of Europe's film and audiovisual heritage), and

- screenplay techniques;

- to support the development of fiction, documentary and animation projects, in particular those making use of new creation or animation techniques or enhancing the European film and audiovisual heritage, through the provision of financial and technical assistance for script-writing, for the establishment of the financial arrangements and the business plan;

- to create a favourable environment for the development of production companies, in particular those making use of new creation or animation techniques or enhancing the European film and audiovisual heritage;

- to strengthen the European distribution sector in the field of cinema and video by favouring the networking of European distributors and encouraging them to invest in the production of European films;

- to favour wider transnational distribution of European films by way of stimulation measures concerning their distribution and their exhibition in cinemas, and to encourage the networking of operators;

- to favour wider transnational circulation of European films and television programmes on various audiovisual platforms (cinema, television, video, multimedia, etc.);

- to actively support linguistic diversity of European works through dubbing, subtitling and multilingual production;

- to improve access for independent producers and distributors to the European and world market, by the implementation of promotion services and actions.

9.2 Grounds for the operation

- Need for Community financial aid

In view of the high cost of participation in the programmes and Bulgaria's precarious budgetary situation, assistance from Phare as provided for in Article 3(2) of the Additional Protocol is essential.

- Choice of ways and means

With a contribution from the national budget supplemented by one from Phare, Bulgaria's participation in the programme concerned should further its integration into Community structures. Moreover the integration of Bulgarian nationals in Community networks will make a definite contribution to preparing Bulgaria for future membership.

- Main factors of uncertainty which could affect the specific results of the operation

Since projects will be selected according to qualitative criteria, it will only be possible to measure the real impact on the basis of Bulgarian firms' capacity to respond to the calls for proposal to be launched by the Commission under the two programmes.

9.3 Monitoring and evaluation of the operation

The monitoring and evaluation procedures included in the MEDIA II programme (notably in respect of evaluation, as included in the decisions establishing this programme) will also cover operations financed for Bulgarian beneficiaries.

10. ADMINISTRATIVE EXPENDITURE

The administrative resources required will actually be mobilised following the annual Commission Decision on the allocation of resources, taking account in particular of manpower and additional amounts granted by the budgetary authority. The supplementary needs can not, in any case, prejudge the decision that the Commission will need to take concerning:

a) the request of new posts in the framework of APB,

b) the resources allocation.

10.1 Impact on the number of posts

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10.2 Overall financial impact of the additional human resources (in EUR)

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10.3 Supplementary costs of an administrative nature as result of the operation (in EUR)

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The above expenditure will be met from the receipts (article 4 2 third indent of the financial regulation) received from the Bulgarian participation in Community programmes (see 5.3 of the financial statement)