Proposal for a Council Decision concerning the Community position within the Association Council on the participation of Hungary in a Community programme within the framework of Community audiovisual policy
Date: 1997-11-07
Institutions: European Commission
Subjects: Central and Eastern European countries, EU programme, Hungary, approximation of laws, audiovisual communications policy

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 07.11.1997 
COM(97) 562 final 

97/0311 (CNS) 

Proposal for a 

COUNCIL DECISION 

concerning  the  Community  position  within  the  Association  Council  on  the 
participation  of  Hungary  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  associated  countries  of  Central 
Europe as an important step forward in their preparation for accession. 
Recently,  in its Communication  "Agenda  2000 - For a stronger  and wider  Europe", the 
Commission  re-iterated  the  importance  of  the  participation  of  applicant  countries  in 
Community programmes, in line with their progressive adoption of the Acquis. 
After  a  first  set  of  Association  Council  Decisions  establishing,  in  accordance  with  the 
relevant  Additional  Protocols 
the 
participation  of the Czech Republic, Hungary  and Romania  in  Community  programmes 
in  the fields of education,  vocational  training  and  youth,  it  is now proposed  to open  up 
the MEDIA II programme for the participation of Hungary from  1998 onwards. 
So  far,  on the basis  of  extensive  exploratory  discussions  with  all  applicant  countries  of 
Central  Europe  throughout  1996  and  1997, Hungary  is  considered  to  be  the  applicant 
country  of  Central  Europe  which  comes  closest  to  meeting  the  legislative  requirements 
defined by the Community's audiovisual policy. 

their  Europe  Agreements,  conditions  for 

to 

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 an applicant  country  of 
Central  Europe  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  91(2)  of  the  Europe  Agreement  stipulates  that  "The  Parties  shall  co 
ordinate  and,  where  appropriate,  harmonise  their  policies  regarding  the  regulation  of 
cross-border broadcasts, technical  standards  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, applicant 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 applicant  country. The principles  and objectives  of 
Community  audiovisual  policy  have been  presented  and  explained  in  detail  in Brussels 
and  in  each  applicant  country  of  Central  Europe.  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  applicant  countries  in  their  preparation  for  participation  in 
MEDIA II. 

13 

In addition to the required  legislative  alignment,  Hungary,  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.  Hungary  has  confirmed  to  the  Commission  in  writing  its 
willingness to participate in MEDIA II as from 1998 and to make available the necessary 
budgetary  appropriations, as calculated by the Commission  services. It envisages paying 
50%  of  its  financial  contribution  from  its  national  budget  and  50%  from  its  Phare 
allocation. 

A question of particular importance to Hungary is the way in which it will be associated 
to  the  management  and  decision  making  process  of  the  Programme  to  which  it  will 
contribute financially.  As mentioned in the Commission Communication "Agenda 2000", 
its  participation  will  be  an  opportunity  to  get  acquainted  with  the  Community's 
legislation and proceedings. In the draft  Association Council Decision, it is proposed that 
Hungary 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 EC-Hungary Association 
Council  adopting  the  terms  and  conditions  for  the  participation  Hungary  in  the 
Community programme in the audiovisual field are the following: 

-  Hungary  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). 

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

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

-Hungary  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 Hungary 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 97/3 6/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,  Hungary  comes  close  to  meeting  the  requirements  defined  by  the 
Community's  audiovisual  policy.  However,  a  close  and  continuous  monitoring  of 
legislative changes, in particular as regards satellite broadcasting, will be required. 

4 

The  adoption  of  an Association  Council  Decision  to allow the Republic  of Hungary,  as 
the  first  applicant  country  of  Central  Europe, to participate  in MEDIA  II  as  from  1998 
will  offer  this  country  the  opportunity  to  actively  integrate  in  the  Community's 
audiovisual policy, at a moment when accession negotiations are scheduled to start. 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  applicant  countries  should  also  be  able  to join  the  Programme  in  the 
course of 1998. 

In order to allow Hungary's participation in MEDIA II as from early  1998, the Council is 
requested to adopt the annexed draft Decision 

Proposal for a 
Council Decision 

concerning  the  Community  position  within  the  Association  Council  on  the 
participation  of  Hungary  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  127(4)  and  Article  130(3),  in  conjunction  with  Article  228  (3)  first  paragraph 
thereof, 

Having regard to the proposal from the Commission, 

Having regard to the opinion of the European Parliament, 

Whereas  Article  91(2)  of  the  Europe  Agreement  stipulates  that  "The  Parties  shall  co 
ordinate  and,  where  appropriate,  harmonise  their  policies  regarding  the  regulation  of 
cross-border broadcasts, technical  standards  and the promotion  of European  audiovisual 
technology."  Whereas  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  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 
. Whereas 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. 

Whereas  Article  97  of  the  Europe  Agreement  between  the  European  Communities  and 
their Member  States, of the one part,  and Hungary,  of the other part,  signed  in  Brussels 
on  16 December  1991, provides  for  the possibility  for  Hungary  to participate  in  actions 
set up in the framework of the MEDIA II Programme. 

Whereas  the  Additional  Protocol  to  the  Europe  Agreement  establishing  an  association 
between  the  European  Communities  and  their  Member  States,  of  the  one  part,  and 
Hungary,  of  the  other  part,  has  been  concluded  by  Decision  of  the  Council  and  the 
Commission of 4 December  1995. 

Whereas  according  to  Article  1 of the  Additional  Protocol, Hungary  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 

1  OJN°L202 of  30.07.1997 
2  OJN°L248of06.10.1993 

conditions  of  Hungary  in  the  activities  referred  to  in  Article  1 shall be  decided  by  the 
Association Council, 

Whereas,  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  and  Council  Decision  95/564/EC  of  22 
December  1995 on the implementation  of a training programme  for professionals  in the 
industry  and  in  particular  Article  5  thereof4 
European  audiovisual  programme 
(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. 

Whereas  Hungary  has  ratified  the  Council  of  Europe  Convention  on  Transfrontier 
Television, which constitutes an important step in the process of legislative alignment. 

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 Hungary, of the other part, concerning the participation  of Hungary 
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, 

3  OJN°L321 of 30.12.1995 
4  OJN°L321 of 30.12.1995 

Draft  Decision  n°..../98  of  the  EC-Hungary  Association  Council  of. 
1998 
adopting the terms and conditions for the participation of Hungary 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  Hungary  of  the 
other, and in particular Articles 91 and 97 thereof, 

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  Hungary,  of  the  other  part  concerning  Hungary's  participation  in  Community 
programmes, and in particular Article  1  and 2 thereof, 

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

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

HAS DECIDED AS FOLLOWS: 

Article 1 

Hungary  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 

The Chairman 

For the Association Council 

1  OJN°L347 of 31.12.1993 
2  OJN°L317of30.12.1995 

ANNEX I 

Terms and conditions for the participation of Hungary in the MEDIA II 
Programme. 

Hungary shall participate in all actions of the MEDIA II Programme  (hereinafter 
1. 
called "the Programme") 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  Hungary 
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, Hungary shall provide the appropriate structures and mechanisms  at national 
level  an,d  shall  take  all  other  necessary  steps  to  ensure  national  co-ordination  and 
organisation  of  the  implementation  of  the  Programme.  In  particular  Hungary  shall 
undertake to establish a MEDIA Desk in collaboration with the European Commission. 

Hungary  shall  pay  each  year  a contribution  to  the  budget  of  the  Community  to 

4. 
cover the costs resulting from its participation in the Programme. 

The rules  governing  the  financial  contribution  of  Hungary  shall  be  those  set  out  in  the 
Annex, 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  and  Hungary  shall  make  every  effort  to 
facilitate free movement and residence of all eligible persons to the programmes moving 
between  Hungary  and  the  Community  for  the  purpose  of  participating  in  activities 
covered by this Decision. 

6. 
Without prejudice to the responsibilities of the Commission and the Community's 
Court  of  Auditors  in  relation  to  the  monitoring  and  evaluation  of  the  programmes 
pursuant  to Articles  7 (MEDIA  II - Development  and Distribution)  and  6 (MEDIA  II -
Training),  the  participation  of  Hungary  in  the  Programme  shall  be  continuously 
monitored on a partnership basis involving the Commission and Hungary. Hungary 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),  Hungary  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 Hungary about the results of such regular meetings. 

The  Commission  and  Hungary  shall  exchange  information  on,  and  monitor  the 
8. 
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. Hungary 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. 

10 

ANNEXn 

FINANCIAL CONTRIBUTION OF HUNGARY TO MEDIA II. 

1.  The financial contribution of Hungary will cover; 

-  financial  support from the Programme to Hungarian 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 Hungary's participation. 

For every budget year, the aggregated amount of the financial  support received from 
the  Programme  by  Hungarian  beneficiaries  and  by  the  MEDIA  Desk  of  Hungary 
will  not  exceed  the  contribution  paid  by  Hungary,  after  deduction  of  the 
supplementary costs of an administrative nature. 

2. 

Should  the  contribution  paid  by  Hungary  to  the  budget  of  the  Community,  after 
deduction of the supplementary costs of an administrative nature, be higher than the 
aggregated  amount  of the financial  support received by the Hungarian  beneficiaries 
and  by  the  MEDIA  Desk  from  the  Programme,  the  Commission  of  the  European 
Communities will transfer  the balance to the next budgetary  exercise, and it will be 
deducted from the following  year's contribution. Should such a balance be left  when 
the  Programme  comes  to  an  end,  the  corresponding  amount  will  be  reimbursed  to 
Hungary. 

3.  Hungary's  annual contribution will be of ECU 649.992 from 1998.  From this sum, 
an  amount  of  ECU  45.499  will  cover  supplementary  costs  of  an  administrative 
nature related  to  the management  of the Programme  by  the  Commission  stemming 
from Hungary's participation. 

For 2000, the amount  of Hungary's  contribution shall be the  same as for  1998 and 
1999, provided  the  annual  appropriation  for  the Programme  shall be  authorised  by 
the budgetary authority in accordance with the relevant financial perspective. 

4.  The  financial  regulation  applicable  to  the  general  budget  of  the  Community  shall 

apply, notably to the management of the contribution of Hungary. 

After  the  entry  into  force  of  this  Decision  and  at  the  beginning  of  each  following 
year,  the  Commission  shall  send  to  Hungary  a call  for  funds  corresponding  to  its 
contribution to the costs under the Decision. 

This contribution  shall be expressed  in ECU and paid into an ECU bank account  of 
the Commission. 

Hungary  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 
Hungary on the outstanding amount  from  the due date. The interest rate corresponds 
to the rate applied by the European Monetary  Co-operation  Fund,  for  the month of 
the due date, for its operations in ECU, increased by 1,5 percentage points. 

11 

5.  Hungary shall pay the supplementary costs of an administrative nature referred to m 

paragraph 3 from its national budget. 

6.  For  the  years  1998  and  1999,  Hungary  shall  pay  50% of  the  remaining  cost  of  its 
participation  from  its  national  budget,  and 50% from its  Phare  annual  programmes 
subject to regular Phare programming procedures. 

For the year 2000, the same breakdown will prevail,  subject to the availability  of the 
relevant budgetary appropriations in Hungary and in the Community. 

12 

FINANCIAL STATEMENT - MEDIA II PROGRAMME 

Article B7-503:  Opening  of  Community  programmes  to  the  associated  countries 

of Central Europe. 

1. TITLE OF OPERATION 
B7-50 - 

Participation of Hungary in the Community Programme MEDIA II 

2. BUDGET HEADING INVOLVED 
B7-503 - 

Opening  of  Community  programmes  to  the  associated  countries  of 
Central Europe 

3. LEGAL BASIS 

Treaty  establishing  the  European  Community,  and  in  particular  Articles  130(3)  and 
127(4), in conjunction with Article 228 (3) thereof. 
Additional Protocol to the Europe Agreement with Hungary (Articles 228 and 238) of 30 
December  1995,  providing  for  the  opening-up  of  Community  programmes  (OJ  No 
317/95, page 30) 
Council Decision  95/563/EC of  10 July  1995 establishing the MEDIA II - Development 
and Distribution programme, and in particular Article 6, thereof. 
Council Decision 95/564/EC of 22 December  1995 establishing the MEDIA II - Training 
programme, and in particular Article 5 thereof. 

4. DESCRIPTION OF OPERATION: 

4.1 

General obj ective 

Hungary'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 Hungary 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  Hungary  entered  into  force  on  1  February  1996  and 
foresees Hungary's participation in MEDIA II. 
The  process  for  opening  up  Community  programmes  has  only  recently  begun.  Other 
Community  programmes,  notably  in  the  fields  of  culture,  health  and  social  policy, 
energy, the environment,  etc., have been or will shortly be opened up to the countries of 
Central Europe, probably during 1998. 

4.2 

Period covered and arrangements for renewal 

Up to the  accession  of the  country  concerned  to the European  Union, but  dependent  on 
decisions taken as regards the budget after  1999. 

13 

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  Hungary 
itself will meet the costs resulting from its participation, it will be invited  to transfer  its 
contribution to item 6091 of the EU's budget receipts. However, as the second paragraph 
of  Article  3  states that  the  Community  may  supplement  Hungary's  contribution  (partly 
from the National Phare Programme), Hungary will contribute only part from its national 
budget, with the remainder being charged to article B7-503. A transfer  from  the relevant 
Phare appropriations (article B7-500) to article B7-503 will be made upon receipt of the 
Hungarian contribution. 

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 Hungary'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 7.4. 

7. FINANCIAL IMPACT 

7.1  Method  of  calculating  total  cost  of  operation  for,  1998,  1999  and  2000  (link 

between individual costs and total cost). 
The calculation is based on the following preconditions: 
-  each partner country's contribution to the financing of the activities referred  to 
in the 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 
partner country's contribution. Each partner country is entitled to use part of its 
National  Phare  Programme  for  complementing  the  contribution  from  its  own 
budget. 

Based  on  the  Additional  Protocol  with  Hungary,  the  financial  and  budgetary 
arrangements  for  the  programme  concerned  are  as  follows:  the  calculation  is 

14 

based  on  a  method  using  GDP  per  capita  as  weighted  with  PPP  (purchasing 
power parties). 
The cost of Hungary's participation in MEDIA II from 1998 will be ECU 649.992 
per year. 

7.2 

Itemised breakdown of cost in ECU 

Programme 

1998 

1999 

2000 

Total 

MEDIA II 

604,493 

604,493 

604,493 

1813,479 

of which 
Hungary 
906,739.50 

of which 
Phare 
906,739.50 

The  above mentioned  figures,  from  which the supplementary  costs of  an  administrative 
nature  amounting  to  45.499  ECU  and  to  be  borne  exclusively  by  Hungary  have  been 
deducted,  are divided per year as follows  : 50% of the operational  costs will be covered 
from Hungary's national budget  and - subject  to the Phare procedures  for  programming 
article  B7-500  -  50%  from  the  annual  Phare  budget  for  Hungary  (National  Phare 
Programme). 

7.3 

Expenditure  on  studies,  expert  meetings,  etc.,  included  in  Part  B:  15  000  ECU 
budgeted  for  participation  of  a  Hungarian  representative  in  5  experts  meetings 
(B3-2010).  This  expenditure  will  be  met  from  the  receipts  (article  4§2,  third 
indent  of  the financial regulation)  received  from  the  Hungarian  participation  in 
Community Programmes (see 5.3 of the financial statement). 

7.4 Schedule for multiannual operations 

Amounts to be charged to article B7-503 

1998 

1999 

2000 

subsequent 
years 

TOTAL 

302,246.50 

302,246.50 

302,246.50 

906,739.50 

151,123.50 
114,854.00 
36,269.00 

Comm. app 
Pay. app. (*) 
1998 
1999 
2000 
subsequent 
years 
Total 
(*) Schedule based on the method of payment currently applying to these programmes. 

151,123.50 
265,977.50 
302,246.50 
187,392.00 

151,123.50 
114,854.00 
36,269.00 

151,123.50 
151,123.00 

906,739.50 

302,246.50 

302,246.50 

302,246.50 

The foreseeable  annual receipts are as follows: 
Item 6091 

1998 

Î999 

2000 

subsequent 
years 

302,246.50 

302,246.50 

302,246.50 

45,499.00 

45,499.00 

45,499.00 

TOTAL 

906,739.50 

136,497.00 

operational 
costs 
supplementary 
costs 
an 
administrative 
Mature 
Total 

of 

347,745.50 

347,745.50 

347,745.50 

1,043,236.50 

15 

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  Hungary  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; 

16 

- 

- 

- 

- 

IA/355RV1/97-EN 
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  Hungary'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, 
Hungary's  participation  in  the programme  concerned  should  further  its  integration  into 
Community  structures.  Moreover  the  integration  of  Hungarian  nationals  in  Community 
networks will make a definite contribution to preparing Hungary 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 Hungarian 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 
programmes) will also cover operations financed for Hungarian 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. 

17 

10.1 Impact on the number of posts 

Type of Post 

Staff  required  to  manage  the 
operation 
Permanent 
posts 

Temporary 
posts 

or 

Officials 
temporary 
staff 
A 
C 
Others 
resources 
TOTAL 

1 
0.5 

1.5 

duration 

1998-2000 

including 

using  existing 
resources  of 
the 
departments 
concerned 

using 
additional 
resources 

1 
0.5 

1.5 

from 1998 

10.2  Overall financial impact of the additional human resources 

(in ECU) 

Officials 
Temporary  staff 
Other resources (indicate budget heading) 
TOTAL 

I 

I 

Total 

Method of calculation 

10.3 Supplementary costs of an administrative nature as result of the operation 

Total 

Method of calculation 

19 499 

9 000 
12 000 

A1300 - missions 
A2500 - meetings 

3%  of  the  additional  funds  to  be  managed  by 
the  agencies  assisting  the  Commission  with  the 
programme 
3 missions per year 
Participation  of  a  Hungarian  representative  in 
4 meetings 
Participation  of  a  Hungarian  representative  in 
5 experts'  meetings 
| 
Total 
The  above  expenditure  will  be  met  from  the  receipts  (article  4§2  third  indent  of  the 
financial  regulation)  received 
in  Community 
programmes (see 5.3 of the financial statement) 

the  Hungarian  participation 

B3-2010 

45 499 

15 000 

from 

1 

(in ECU) 
Budget  heading  (No 
and title) 
A1178/A238 
technical assistance 

- 

18 

ISSN 0254-1475 

COM(97) 562 final 

DOCUMENTS 

EN 

11  15  06 

Catalogue number  :  CB-CO-97-581-EN-C 

ISBN 92-78-26802-X 

Office  for Official  Publications of the European Communities 

L-2985 Luxembourg