German GLS bank launches bond to promote press freedom

Germany's largest ethical bank is selling a multimillion-dollar bond to invest in threatened media companies and promote journalistic independence in Eastern Europe

Mics belonging to two news organisations (DW)
Mics belonging to two news organisations (DW)


Freedom of the press and media diversity are some of the most important mainstays of democratic societies. But despite calling themselves democratic, some governments in Central and Eastern Europe are trying to exert undue influence on their country's independent media.

In Hungary and Poland, for example, government-affiliated companies have bought some or all of the stocks of media companies, allegedly in efforts to manipulate public opinion in favor of the ruling parties, as critics claim.

Those media companies under government pressure will now be thrown a financial lifeline from GLS bank — Germany's largest ethical lender based in Bochum and investing solely in social and ecological causes.

GLS has issued a so-called impact bond in collaboration with the nonprofit Media Development Investment Fund (MDIF) and Dutch Pluralis — a company that emerged from the MDIF. The aim of the bond issuance to the tune of €5 million ($5.5 million) is to financially support independent media in the region and ensure their independent reporting.

Aysel Osmanoglu, the spokeswoman for the GLS board, says the bank feels shared responsibility for press freedom. "As GLS Bank, we want to help ensure that citizens have access to independent information so they can form their own opinions," she told DW.

Economic independence, as well as a viable business model, are indispensable, Osmanoglu said, which is why her bank supports the "important work" of Pluralis.

Under the scheme, investors can subscribe to the bonds for a price of €1,000 a piece.

First bond already issued

Pluralis is an impact investment vehicle managed by MDIF with the objective of promoting plurality of news across Europe. Senior advisor Max von Abendroth puts the targeted investment volume at a total of €100 million.

"With the help of the GLS bond, which was issued at the end of March, we've so far acquired €50 million of it," von Abendroth told DW.

In addition to MDIF, Pluralis is backed by various European media companies and democracy-building organizations such as Belgium's King Baudouin Foundation, the Dutch company Mediahuis and the Oak Foundation. Pluralis invests in media companies that cannot raise conventional financing in their home countries, or are on the verge of losing their independence due to financial constraints. The aim is to protect these media companies from the influence of state actors like governments or political parties.

Press freedom in freefall

Press and media freedom are threatened by media capture, especially in Central and Eastern Europe, claims Max von Abendroth.

"This refers to the takeover of media companies by governments or interest groups close to governments with the goal of gaining political influence and not so much the economic success of the media company in mind."

He says this is most evident in Hungary and Poland recently, but also in Slovakia, Croatia, Romania and Bosnia-Herzegovina – countries that "have lost considerable ground in the Reporters Without Borders Press Freedom Index ranking in recent years."

Poland, for example, has since plummeted from 18th place in that ranking in 2015 to 66th. Hungary even dropped to 85th place after the takeover of major TV and radio stations as well as news portals and print media by oligarchs close to the government of Prime Minister Viktor Orban.

'Repolonization' of the media

In Poland, Pluralis has long observed a so-called repolonization of the media sector by the government and the governing PiS party.

"Rights and rules for foreign investors are being tightened, making it less attractive for foreign investors to invest in media houses in Poland," said Max von Abendroth.

On the surface, media houses would be sold with the claim of creating greater media diversity, he argued, in reality, however, the strategy is to gain maximum influence on the media landscape in Poland.

As an example of this, von Abendroth cites the Polska Press Group, which previously belonged to the German publishing group Passau before it was taken over by the state-controlled Polish oil company Orlen.

"Polska Press Group owned 20 of the 24 regional dailies. Today, they are completely under the control of the PiS party," he said.

Pluralis has found that the Polish government also uses funding from state advertising to advance its special interests — advertising money that is given in particular to media houses that support PiS policies. like the rightwing Gazeta Polska newspaper.

For Pluralis, Poland is a country that urgently needs investors from abroad "who see the social benefits of free media and media diversity as their main investment focus."

A commitment that pays off

Where possible, Pluralis makes a direct investment after thoroughly verifying a media outlet's journalistic independence. The company has so far invested €32 million in independent media in Slovakia and Poland — in Slovakia's Petit Press media house, for example, and in Poland in the Gremi media company. Max von Abendroth said that Pluralis has made Poland the main focus of its current activities.

Germany's GLS bank is running on the theme that money should be there for the people, which includes making sure that access to independent media and information is also guaranteed in Central and Eastern Europe. Any money spent on the cause can be rewarding, too, as bondholders are assured an annual risk-free return of 5% interest on the 10-year bond investment.

This article was originally published in German.

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