$237 mil German fund gets go-ahead from EC

Film grants tied to cultural tests

The European Commission gave the green light to a three-year, €180 million ($237 million) German film fund Thursday.

The fund, which will run from the beginning of next year until the end of 2009, will provide direct grants to producers to encourage the production of feature films, documentaries and animated projects.

"The commission is satisfied that the new German film fund complies with EU state aid rules," EU Competition Commissioner Neelie Kroes said.

The subsidies are granted an opt-out from the usual EU rules banning state aid if they meet strict conditions that allow governments to fund art and culture.

German films that are not produced with other European companies must pass a test that gives points for cultural contribution. To pass the test, a film must obtain at least 16 of the available maximum of 31 points for criteria concerning "cultural content," "creative talent" and "production."

The system grants four points, for instance, if at least two of the three lead characters are "German characters" but only one point if one of the three lead characters is a "German character." Points also are awarded based on the film's representation or reflection of German cultural heritage, on how much German is spoken by the crew, what passports the film crew holds and the use of German locations.

The decision comes a month after the commission cleared tax breaks for the British film industry on similar conditions of meeting a cultural test.

Cinema attendance in Germany was 127.3 million in 2005, according to the European Audiovisual Observatory, an 18.8% drop from the 156.7 million recorded in 2004 and 177.9 million in 2001.