Written by on Jun 22, 2011. Posted in On Location

EC to review how member states support international film productions

The European Commission (EC) has launched the first stage of a review into how its members allocate state support for film production and distribution. One of the main discussion points will be how state aid is used when European countries compete to host major film franchises.

Member states in the European Union provide annual financial support for film productions to the tune of about EUR2.3 billion a year. Just less than half of this is provided through national filming tax incentives.

Joaquín Almunia, EC Vice President in charge of competition policy, said: “My colleagues and I want to gather views about what the common European objective of such support should be.

Does a subsidy race to attract major US productions undermine the effectiveness of aid to support smaller European films?

Joaquín Almunia, European Commission

“For example, does a subsidy race to attract major US productions undermine the effectiveness of aid to support smaller European films? Does the scope of our rules need to go beyond encouraging the production of more films? And is support needed to encourage filmmakers to explore the possibilities of the digital revolution?”

The existing ten-year-old rules for state film production support are known as the Cinema Communication. One of the rules is that producers using a given state incentive must have the option of spending at least 20% of their production budget in other member states without losing the original support.