EC eyes reform to film subsidy rules

Responds to European University Institute report

BRUSSELS -- As the European Commission considers how to reform its rules on government aid for cinema, an influential report has warned that the subsidies are based on indefinable criteria about their cultural value and therefore constitute a legal "no man's land."

The report, by the European University Institute, says that the selective aid schemes allow government panels to decide the merits of movie projects according to subjective criteria such as quality or cultural value.

The EUI report says that states habitually abuse their subsidy power, censoring content, which in turn promotes "clientelism and corruption that can eventually destroy artistic creativity and entrepreneurial innovation."

It suggests that cultural industries should be protected from favoritism of bureaucracies, and calls for a legally enforceable separation between the state and culture.

The European Commission is reviewing Europe's estimated $1.7 billion-a-year state aid to cinema, more than half of which originates from the French government.

EU Information Society and Media Commissioner Viviane Reding and Competition Commissioner Neelie Kroes want to overhaul the system, whose regime expires at the end of 2012.