Subsidy cut prompts alarm in Estonia

More financing cuts are expected into 2009

MOSCOW -- Estonia's film industry, which depends heavily on state subsidies, may be facing a tough period, as state financing for this year has been reduced and more cuts are expected in 2009.

Although the cut of 20,700 ($29,000) to this year's 4.1 million euro ($5.7 million) budget amounts to just 0.5%, industry players say the precedent is alarming and that the effect of the cut is likely to be aggravated by inflation. They also fear that subsidy cuts may be more substantial next year.