Filmmaker subsidies gain EU lifeline through 2009

 Commission signs off on gov't grants

European filmmakers can continue claiming government grants for their movies for another two-and-a-half years, until 2009, the European Commission has ruled (HR 6/15).

The commission — the European Union's executive authority — made the decision just two weeks before the governance for state subsidies was due to expire.

EU information society and media commissioner Viviane Reding said the extension will give businesses and governments the legal certainty needed to keep investing in European films, TV series and other audiovisual works. "Today's decision gives all stakeholders the agenda for the definition of the future rules," she said.

Current EU subsidy rules allow national governments to fund up to half of a film's budget. Under the rules, first set up in 2001, governments must first prove that the movie in question is "a cultural product." They can cover more than 50% of a movie's cost if the film in question is considered "difficult" or has a low budget.

Government aid is restricted in the EU as it can distort the wider European market. But EU competition commissioner Neelie Kroes said the aid will be acceptable if it does not affect trade and competition in the EU's internal market. "Our aim is to ensure that state aid control continues to ensure optimal and equal conditions for artistic and cultural creation in the cinematographic and audiovisual sectors across the EU," she said.

Total government aid for EU filmmakers is estimated at €1.2 billion ($1.6 billion) a year, more than half of which is provided by the French government. Filmmakers argue that they need the exemption from the usual EU state aid rules as cinema is a very specific sector and European films have a very low market share.

Last year, 926 million cinema tickets were sold in the EU, 3.6% more than 2005. European films accounted for 28% of these.