The announced acquisition by Czech wealthiest businessman of a major broadcasting company may further imperil the state of the media in the region. Find below this and other news highlights from the week as well as stories that will be developing in the near future.

 

Moscow pilgrimage to Budapest

Russian President Vladimir Putin visited his Hungarian counterpart in Budapest yesterday, to discuss several dossiers where the two strongmen see room for closer cooperation. Among others, they talked about a nuclear power plant expansion which will see a greater role played by the state-owned company Rosatom, as well as the next part of the TurkStream gas pipeline. Another possible subject may have been the persecution of Christian communities worldwide. Recently, Orbán has been criticised for his excessive reliance on Christian identity and symbols, also extending privileges to churches in Hungary.

Putin and Orbán have had a diplomatic encounter at least once a year, which is significantly higher than other European leaders.

What makes the brotherly meetings even more difficult, is the fact that sanctions against Russia are still in place, over the annexation of Crimea, as well as its exclusion from the G8 meetings between Western leaders.

Hungary has made little effort in recent weeks to improve its image within the EU and NATO. Hungarian tax authorities raided the offices of the opposition party Momentum, after they made a strong showing in the recent municipal elections. On the diplomatic level, Hungary blocked a joint NATO-declaration on Ukraine, simply because it lacked a specific reference to minority rights. The status of the ethnic Hungarian minority within Ukraine has been a major cause for friction between the two neighbouring countries, but cannot be seen as separate from Kyiv’s desire to move closer to NATO while Orbán prefers to retain a tight relationship with his Russian ally.

V4 supply chains at risk

The economic slowdown in Germany is beginning to have effects for the Visegrad countries (V4). The Financial Times reported a reduction in the number of orders, while stocks and unsold goods increased for companies. In particular, the automotive sector, with a network of production plants and related industries in Central Europe, is at risk if the Germany economy continues to cool down.

Germany’s GDP is expected to grow by one per cent, which is slightly above expectations but a pace that is remote from the steady growth numbers that were recorded in previous years. Most projections for the V4 indicate deceleration of GDP growth in the next year.

Fears of reduced growth in the V4 region coincide with questions about pressing labour shortages, the uncertainty over EU cohesion spending part of the next Multiannual Financial Framework and the transition from a cheap labour economy to a value-added one based on innovation and sustainable growth. Many of these questions were subject of our recent report on future scenarios for cohesive growth in the region.

Meanwhile, Brexit could pay some dividends for the region. Toyota announced it will boost its presence in Poland, particularly for the production of hybrid vehicles. This is a consequence of the continued uncertainty over the UK’s withdrawal from the EU.

Trolling with state subsidies

The Polish edition of Newsweek published a scoop concerning a troll farm that sought to improve the image of the Polish state broadcaster, supported the electoral campaign and lobbied on behalf of defence companies, while it was receiving state subsidies. According to Newsweek.pl, the troll farm was operating under the company name of Cat@Net; it hired disabled people as trolls, which in turn gave them access to funding from the State Fund for the Rehabilitation of the Disabled.

Although Cat@Net defended public broadcaster TVP and its president Jacek Kurski on social media, it ran troll accounts to support both right-wing and left-wing politicians. The company’s activities appear to be traceable back to Bartłomiej Misiewicz, a politician who acted as head of the cabinet and press spokesperson for the former Defence Minister Antoni Macierewicz.

Misiewicz, who was arrested regarding a corruption case earlier this year, has denied his involvement with the troll farm.

Czechoslovak anniversary

On 28 October both Czechia and Slovakia commemorated the birth of independent Czechoslovakia in 1918. Politicians, as well as members of the public, paid their respects to the co-founder of Czechoslovakia and the country’s first President Tomas Garrigue Masaryk.

Last year, historian Jiří Hanuš explained that the events of 1918 should also be seen in the light of the more recent Velvet Revolution of 1989:

“In celebrating 1918, we are first and foremost celebrating the end of the communist regime in 1989 and the resulting “homecoming” – coming back to a place where we have the right to be politically independent, to live without pretence, foster an independent culture, celebrate the values that the communist regime attempted to erase from our national memory, and to teach and research without political hindrance – even though we now know that coming back is not easy.”

In Bratislava, Slovak President Zuzana Čaputová underlined the importance of the Czechoslovak experience on the road to democracy and economic prosperity, adding that Slovakia benefited hugely from their brief, but shared political experience. Currently, the anniversary is celebrated only in Czechia as a public holiday, although Čaputová has hinted at the possibility of doing the same in Slovakia.

Czech media takeover

At the beginning of the week, Central European Media Enterprises (CME) announced it would be acquired by a Czech investment group. CME is one of the largest broadcasters in the region, operating 30 television channels in Bulgaria, Czechia, Romania, Slovakia and Slovenia.

In contrast, the PPF Group that is set to buy the broadcaster is an investment vehicle that is active in multiple markets. Among others, PFF Group has invested in biotechnology, real estate and mechanical engineering. The Group is best known because it is owned by Czechia’s wealthiest businessman and billionaire, Petr Kellner.

Kellner commented on the announcement that “CME is a healthy and well-run organisation and we do not intend to make any significant changes to its operations.” PFF already owns Internet and cable TV infrastructure, thereby creating a synergy between different investments.

The acquisition is still subject to approval by shareholders, the Czech media regulator and the European Commission, but could be finalised by the middle of the next year. There may yet be a rejection of the deal, as PPF was blocked from buying a Bulgarian media group earlier this year.

The prices of shares in CME dropped with six per cent after the news was announced over the weekend.

CME’s possible change of ownership would be another example of the changes in the media landscape in Central and Eastern Europe. In Czechia, as elsewhere, restrictions to editorial autonomy, a lack of institutional safeguards, concentrated media ownership as well as ownership by politicians and wealthy businessmen present limits to media pluralism and independence.

Josef Šlerka of the Foundation for Independent Journalism, in an interview with Radio Prague International, doubts the acquisition can only be seen as a business move. “The fact alone that somebody who is one of the biggest businessmen in Central Europe owns media is bad news.” Šlerka considers that a new standard is being set – one that is not good for the press – by the fact that all big entrepreneurs also want to have their own media.

Dr Quincy R. Cloet is Deputy Managing Editor of Visegrad Insight


Scenarios for cohesive growth

As of 2019 the negotiations about the next Multiannual Financial Framework (MFF) will enter a critical moment. In the face of an imminent Brexit and the fallout from global turmoil, the EU has to reflect on its guiding principles and take decisions to fulfil the promise of a united Europe.

Download the report in PDF

The Visegrad/Insight is the main platform of debate and analysis on Central Europe. This report has been developed in cooperation with the Centre for European Policy Studies (CEPS).

Launched on 1 October 2019 at the European #Futures Forum in Brussels.