European Film Academy Protests Changes to EU Film Funding

Proposed new legislation by the European Commission could restrict or end territorial tax rebate schemes.

COLOGNE, Germany – The European Film Academy has joined the chorus of industry voices raised up in opposition to proposed changes to regulations governing film funding in Europe.

The EFA board on Tuesday issued a declaration in support of the German and French film boards, who have condemned plans by the European Union's executive body, the European Commission (EC), to level out state aid for film funding across Europe. The move would hit France and Germany hardest, as they have the most generous subsidies and tax rebates for film funding.

In a statement, the EFA board said it “is pleading (with) the European Commission to take...these concerns seriously and come to an agreement with the member states.”

The main point of contention is an initial proposal by the European Commission that would limit spending obligations for a film receiving state aid. Currently, most European funding programs require producers to spend 80 percent of their production budget within the country offering the incentives. The new regulations would limit spending obligations to the amount of aid received. So for example a €1 million local subsidy would translate into a €1 million local spend, whatever the film's overall budget.

The EC has said the changes are needed to stop the subsidy race between bigger European nations – particularly Germany and France – which continue to offer more and more generous incentives to filmmakers to shoot there. The EC would also like to curb the state funding that goes to back big Hollywood productions that shoot in Europe.

What is at state is the estimated $3 billion (€2.3 billion) granted by EU states in film support annually.

But the European Film Academy - as well as government film bodies in Germany and France – argues that the changes will sabotage local funding schemes and ultimately lead to less cultural diversity in Europe.

The EC might already be backing down. The Commission has pushed back the deadline for its revision of the EU's Cinema Communication regulations from late December to early next year.

European Commission vice president Joaquín Almunia, who is responsible for competition policy, has said the new draft of the legislation “already takes into account many of the concerns expressed by member states” but that the Commission was “willing to resume consultations in January.”