EC extending cinema aid plan

Aim is for 'sustainable European film sector'

BRUSSELS -- The European Commission unveiled plans Thursday to extend the current EU state aid for cinema plan until the end of 2012.

EU information society and media commissioner Viviane Reding and competition commissioner Neelie Kroes said they would continue with the mechanism that allows national governments to aid cinema in spite of general antitrust rules banning such interventions.

"We firmly believe that whatever state aid there is for film should have the cultural aim of ensuring Europe's national and regional cultures and creative potential," they said in a joint statement, adding "it should also aim to lead to a sustainable European film sector."

Total government aid for filmmakers in the EU is estimated at 1.2 billion euros ($1.7 billion) a year, with more than half provided by the French government.

Reding and Kroes want to overhaul the system but haven't time to make a case for change before the current regime expires in 2009.

The current plan allows state aid for cinema because it is considered a "cultural product." Projects must fulfill key criteria: The producer must be free to spend at least 20% of the production budget in other EU member states without incurring aid cuts, and aid intensity must be limited to 50% of the production budget, except for "difficult and low-budget" films.