State aid: Commission endorses two new Dutch film funds
European Commission - IP/07/1083 12/07/2007
Brussels, 12th July 2007
The European Commission has endorsed under EC Treaty state aid rules two new funds in The Netherlands for supporting cinema films. The funds with a total budget of €162 million are available in the form of direct grants for the production and the release in cinemas of feature films of cultural value that contribute to the diversity of films in The Netherlands. The Commission’s investigation found that the schemes were compatible with the criteria set out in its 2001 Communication on state aid for cinema and audiovisual works (see IP/01/1326). The schemes have been approved until 1 July 2013.
Competition Commissioner Neelie Kroes commented: “The Commission is satisfied that the new Dutch film funds comply with EU state aid rules. Thanks to the cooperation of the Dutch authorities, we were able to approve these schemes, which aim to produce and release high quality Dutch films, quickly. ”
The total budget of the new Dutch film funds amount to €162 million with an annual budget of €27 million. The aid takes the form of direct grants and will in principle not exceed 50% of the films' costs, with possible exceptions for difficult and low budget films.
In order to be eligible for support under the schemes, cinema feature films need to meet at least three out of seven possible cultural criteria:
The Commission has approved these schemes based on the criteria to assess aid to assist film production laid down in its 2001 Communication. However, as this Communication is due to expire at the latest on 31 December 2009, the Dutch authorities have undertaken to make any changes to the schemes that might be required by possible new EU rules.
As is the case with other European film support schemes, the new Dutch film funds contain territorial conditions, which require that a proportion of the film production expenditure is incurred in the Netherlands. Such conditions are allowed under the 2001 Communication, provided that they do not exceed 80% of the film production budget. In preparation for its review of this Communication, the Commission has launched a study to examine the economic and cultural effects of such territorial conditions. The results of the study should be available in late 2007.
The Communication on state aid to cinema and audiovisual works in Europe sets out the criteria under which the cultural derogation in Article 87 (3) (d) of the EC Treaty can be applied to such aid (see IP/01/1326). In 2004, the validity of the Communication was extended until 30 June 2007 (see IP/04/343) and on 13 June 2007 it was further extended until 31 December 2009 at the latest (see IP/07/820). This Communication requires the ‘general legality principle’ to be respected and sets out four additional specific compatibility criteria according to which aid for the production of films for cinema and TV can be approved as cultural aid. These criteria are that the - aid must benefit a cultural product- the producer must be free to spend at least 20% of the production budget in other Member States without suffering any reduction in the aid provided for under the scheme (so-called ‘territorialisation clauses’) - the aid intensity in principle must be limited to 50% of the production budget (except for difficult and low budget films) and - aid supplements for specific film-making activities are not allowed.