Brussels, 06/07/2006 (Agence Europe) - The European Commission has given the go-ahead to the financial restructuring agreement for the public service broadcaster RTP. This agreement, which runs until 2019, is aimed at progressively reducing RTP's debt of about €1 billion. After an investigation, the Commission concluded that this debt is almost entirely due to the constant under financing of RTP's public service tasks in the past and that the financial support now given by the state is proportional to RTP's public financing deficit. On Wednesday Competition Commissioner Neelie Kroes said “This decision confirms Member States' rights to define public service tasks and to compensate broadcasters for performing them, provided that the compensation is proportional to the actual costs of the public service mission.” In March 2006, the Commission closed its enquiry into the new financing system of RTP, introduced in 2003. This decision followed commitments from Portugal to increase transparency and proportionality in the system (EUROPE 9158). The Commission was then required to assess the measures intended to reduce the debt. The investigation demonstrated that the annual compensations paid to RTP were subject to VAT, which reduced their net value; the state failed to pay the full amounts due to RTP under the concession agreements; and the concession agreements did not allow RTP to claim compensation for the full costs of public service provision.