How will the EU make the foreign financing of media transparent?

The task looks particularly challenging for Eastern European media.

By: Momchil Injov,  EU Correspondent for Bulgaria’s Club Z

The European Commission hastened to announce the presentation of the ‘defense of democracy package’, and for that same reason, decided to postpone it, according to diplomatic sources in Brussels.

Vera Jourova, the Commission Vice-President for Values and Transparency, had announced on multiple occasions that the presentation would take place on 7 June. But the surprise came during a debate in the European Parliament on 1 June.

“Together with the President [Ursula von der Leyen] we decided to take more time to consult broadly and gather more information in order to address also the concerns we heard in this house. We will enforce the analysis underlying the proposal and upgrade it into a full impact assessment. This is important legislation, and I want to make sure it will be balanced, meaningful and effective,” Jourova told the MEPs.

A Commission spokesperson confirmed the day after that the proposal would be postponed.

“For the Commission, it is of utmost importance to find the right the balance for this new tool, particularly the Directive of transparency of interest representation activities, also in the light of the intensifying geopolitical competition. That’s why we are preparing an impact assessment on the new Directive,” the spokesperson added.

Of course, this package covers the media in a very sensitive way, Berlaymont sources told.

According to Jourova, the Commission wants to introduce a system of transparency, which will mean that the actors operating on the European single market – including NGOs and other entities contracted by third-country governments or connected to governments, will be obligated to publicly disclose their contractual engagements to provide services in Europe on behalf of third-countries.

According to our sources in Brussels, the decision to postpone the proposal is a result of significant protests and concerns by NGOs, but also by certain Members of the European Parliament (MEPs). All they fear is that the new act will resemble the United States Foreign Agents Registration Act (FARA), the withdrawn Georgian foreign agents bill and even the Russia's foreign agents law.

“We are not creating a system where we label somebody. We never sought about labeling somebody foreign agent or impose criminal sanctions like you can see in American and Australian law. We are not going to stigmatize anyone”, Vera Jourova said on 24 May during a discussion with Vessela Tcherneva, Deputy Director of the European Council on Foreign Relations.

The Commission does not want to penalize anything, she told MEPs on 1 June.

Nevertheless, the concerns remain.

According to sources in Berlaymont, despite the Commissioner's assurances, it appears to be quite challenging for the media to avoid being labelled.

Additionally, they mentioned that the Commission itself is facing difficulties. For instance, the Commission has not reached a decision regarding whether to impose a threshold or ceiling for the amount that NGOs, media, or other entities will be required to disclose.

“It is not clear, and it is still a subject of discussion if an amount, let's say, an amount of 500 euro received as financing is considerable in order to be declared,” they added.

Another problem is data privacy. “We will give the chance to those who will fear of some stigmatization that they will ask not to be registered in that public part of the registration. So we try to avoid abuse or negative effect on those who will be registered”, Commission Jourova said.

One more issue arises with regard to financing independent European media through other means. There are concerns about European media outlets that have already been acquired by proxies of third-countries.

“For example, a Russian oligarch connected with the Russian government owns a media outlet in,  let’s say,  France. This media outlet offers financial help to a poorer outlet in Czechia, in exchange for some hidden political advertising or anti-European propaganda. How will the competent authorities proceed? This is difficult to answer, even for Commission officials involved in the preparation of the “defence of democracy package,” our interlocutors answered.

It is important to note that the dissemination of anti-European propaganda is not subject to persecution. Every criticism directed at the EU or its institutions, even the harshest one, can always be considered constructive.

Every form of criticism, including the most severe, directed at the European Union (EU) or its institutions, can be regarded as constructive. It is worth considering instances such as the Qatargate scandal, where attacks against the European Parliament and its commissions occurred. The question arises as to whether these attacks can be prohibited or criminalized. Some media outlets that receive funding from countries like Russia and China can be seen to benefit from such circumstances.

Finally, the proposed package could have significant negative consequences for the Eastern European media, a substantial portion of which is already in a vulnerable state. Firstly, the challenging transition experienced by countries such as Bulgaria and Romania, which lag behind other states in implementing necessary reforms. Secondly, the lack of stable financing further exacerbates the situation, making it even more difficult for these media outlets to sustain themselves.

The landscape of media has experienced significant changes, with traditional newspapers nearly disappearing and transitioning into online platforms. The withdrawal of influential investors in the region, like the German WAZ Group, has had a considerable impact. A significant portion of media outlets are grappling with the challenge of survival. In Bulgaria, for instance, the America for Bulgaria Foundation provides financing to certain media organizations. However, if these media outlets are required to publicly disclose their sources of funding, it could potentially introduce further difficulties, particularly due to the presence of a strong pro-Russian lobby and the spread of anti-Western propaganda.

The situation in Serbia, an EU accession candidate, presents its own set of challenges. President Aleksandar Vucic has faced accusations of implementing soft censorship on the media. During the wars in former Yugoslavia, Vucic served as the Minister of Information of Serbia and was involved in censoring media outlets that opposed the regime of Slobodan Milosevic, by fining journalists and even banning TV channels. The media freedom in Serbia today remains in a tense situation.

These concerns are part of the Commission's decision to postpone the package. The EU needs more time to ensure a well-balanced and effective approach to the proposed ‘defense of democracy package,’ particularly on the media freedom front in Eastern Europe.