State aid: Commission endorses media support schemes in Poland, Ireland, France and Denmark
European Commission - IP/06/641 17/05/2006
Brussels, 17th May 2006
The European Commission has approved under EC Treaty state aid rules four aid schemes which support film-making in Poland and Ireland, music recordings by new talent in France and newspaper distribution in Denmark. The Polish scheme provides grants to support all stages of production, distribution and promotion of films that are relevant to Polish and European culture. In Ireland, tax incentives are given to investors in film production. The French scheme aids music productions that have lesser commercial appeal. In Denmark, the subsidy will compensate part of distribution costs and promote the availability of certain newspapers. The Commission concluded that in all four cases the subsidies would not give rise to undue distortion of competition within the Single Market.
“These decisions illustrate how state aid rules can allow Member States to support media and culture, while ensuring that competition concerns are taken into account”, said EU Competition Commissioner Neelie Kroes.
Legislation setting up the Polish audiovisual fund and the Polish Film Institute came into force on 1 January 2006. The aid, which will be administered by the Polish Film Institute, will amount to PLN100 million (€25.4 million) per year. It will support the preparation of film projects, film production, film distribution and dissemination, the promotion of Polish film-making and the dissemination of film culture, including the production of films by Polish expatriate centres. Following an amendment to the legislation made on 5 May 2006 to reduce the scope of the territorial conditions and of the aid intensities included in the original legislation, the Commission was able to conclude that the scheme is compatible with Article 87(3)(d) EC-Treaty, which allows aid to promote culture, provided it does not unduly distort trade and competition within the Single Market.
The Irish scheme to support film production, which amends an earlier scheme previously approved by the Commission, allows film production companies to obtain 80% tax relief on investments of up to €35 million or 80% of the production budget of a single film. The Commission concluded that the amended scheme is also compatible with Article 87(3)(d).
The French aid scheme to promote music production approved by the Commission takes the form of a tax break to music producers. The scheme, which would provide aid of up to an estimated total of €10 million per year, covers part of the costs of production and promotion of albums of new talents and instrumental music. The measure is directed at albums which are considered to be cultural products. The scheme also ensures that the aid is limited to the minimum, and is mainly directed at small- and medium-sized enterprises. For these reasons, the Commission concluded that the scheme is compatible with Article 87(3)(d).
The Danish Government intends to give publishers of certain newspaper-like publications direct grants totalling DKK10 million (€1.3 million). The grants are designed to support the distribution of these publications while leaving publishers free to choose the distributors. The Commission took into account the beneficial effects of the aid in promoting media pluralism and the propagation of socio-political news to Danish citizens. It considered that the aid would not significantly distort competition or affect trade between EU Member States and therefore approved the scheme under Article 87(3)(c) of the EC Treaty, which allows aid to certain economic activities, provided it does not unduly distort trade and competition within the Single Market.