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17th Aug 2017

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EU to re-write cinema subsidy rules

  • The European Commission has unveiled plans to revise the rules on public subsidies for film production (Photo: European Commission)

The European Commission on Wednesday (14 March) launched plans to re-writer EU rules on state aid for cinema this year.

Member States across the EU provide around €3bn per year in support for film production, with the funding consisting of grants, loans and tax incentives.

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The Commission is proposing to extend the scope of the funding rules to include all phases of production from initial proposal to public release in a bid to increase distribution of European films.

It also attempts to define a "European audiovisual work", with production companies being required to be EU-based, and establishes a points system to calculate whether the majority of the production team are EU residents.

The current rules for film and TV production support schemes state that producers must spend at least 80 percent of the production budget in the territory offering the aid. The Commission paper indicated that member states should be allowed to require up to 100 percent of the funding is spend in the country providing state support. It also wants member states to be able to loosen rules on tax incentives and to promote cross-border availability of films by asking rights holders to release online rights on condition of aid.

However, the Commission has insisted that state aid schemes cannot reserve funding just for their own nationals, nor can they require film companies to be based in the country providing aid or force foreign film-making companies to comply with national labour laws.

The current rules limit state aid for films to 50 percent of the total production costs and forbid member states from earmarking funds for specific film-making activities.

The first Commission paper on European cinema was published in 2001, under EU treaty provisions that allow countries to support cultural activities provide that they do not breach competition and trade in the single market, and was last updated in 2009.

The current state aid rules will expire at the end of 2012. The consultation will be open until June before the EU executive adopts the final communication.

Launching the paper, Competition Commissioner Joaquin Almunia said that he wanted to see new guidelines that would be "beneficial both for the entire European audiovisual sector and for European audiences."

Meanwhile, earlier this week the Commission announced €5m in funding for 35 film-related projects from the MEDIA Mundus programme, the EU's programme for the audiovisual industry that looks to increase distribution of European films outside the EU.

Last month two films supported by the MEDIA programme also won awards at the Berlinale International Film Festival. "A Royal Affair" won Silver Bear awards for Best Script and Best Actor, while "L’enfant d’en haut/Sister” received a special Silver Bear award.

Meanwhile, French production company La Petite Reine, which was responsible for this year's Oscar-winning film The Artist has also been a frequent beneficiary.

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