The EBU, the Geneva-based broadcaster that organizes the contest, said it had urged Romania's struggling state broadcaster TVR to pay debts which have accumulated over the past four years or face being prevented from covering the show, with the country's entrant likewise banned.
Ovidiu Anton, this year's Romanian entry — who is set to perform the English-language song Moment of Silence — may now be forced out of the lineup.
“In a letter to the Finance Minister of Romania Anca Dragu sent on April 15th, the EBU requested a down payment of 10 million (Swiss francs) to be received in the EBU´s bank account by close of business on Wednesday April 20th 2016” or face exclusion, the EBU said.
The organization added it had also asked for an “unconditional and irrevocable” bank guarantee for the rest of the debt, a further six million francs, and evidence of a payment plan by year end.
If the Romanian broadcaster does not comply “this will have a number of consequences, one of which is that TVR will not be allowed to participate in the Eurovision Song Contest in May 2016,” the EBU said.
TVR said in a statement that it made a repayment of 250,000 euros in January.
The station had then told the EBU that it didn't have the means to pay any more back and asked for “understanding and tolerance” in the light of its “disastrous” financial state after reporting 2015 losses of 5.4 million euros.
The EBU warned that TVR's rights to show other upcoming international events were also at risk — including the Euro 2016 football tournament in June and the Rio Olympics in August.
Romania's Prime Minister Dacian Ciolos said on Monday the government would be seeking to broker a solution to avoid being locked out of a competition watched by a global audience of 197 million last year.
In 22 years of appearances the Romanians have never won Eurovision, twice placing third. Last year's entry, popular Romanian pop-rock band Voltaj, placed 15th.
Headquartered in Geneva, the EBU has organized the Eurovision Song Contest since its conception, 60 years ago, when it was first held in Lugano, in the Swiss canton of Ticino.
This year's competition kicks off on May 10th with the semifinals, before the grand final on May 14th.
Switzerland's entry is the Canadian-born Rykka, singing The Last of Our Kind.