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Brussels, 13th June 2007

State aid: Commission maintains current rules for film and TV production

The European Commission adopted today a Communication extending until 31st December 2009 at the latest the application of the current rules on state aid to cinematographic and other audiovisual works. This Cinema Communication extends the rules laid down in the previous Communications of 2001 and 2004. This continuity should further encourage Europe's audiovisual industry by maintaining the current conditions and thereby helping the industry to face future challenges in a highly competitive market.

Competition Commissioner Neelie Kroes said:"Our aim is to ensure that state aid control continues to ensure optimal and equal conditions for artistic and cultural creation in the cinematographic and audiovisual sectors across the Union."

"Today's Commission decision, which follows closely the agreement on the Audiovisual Media Services Without Frontiers Directive, gives the Member States and investors the legal certainty needed to keep investing in European films, TV series and other audiovisual works" said Viviane Reding, European Commissioner for the Information Society and Media. "Today's decision gives all stakeholders the agenda for the definition of the future rules, with a view to further improving the balance between the challenge of promoting diversity and the need to strengthen the competitiveness of the audiovisual industry."

The extension decided today means that the Commission will continue to apply the current criteria for assessing the compatibility of Member State's aid schemes with state aid rules as initially set out in the so-called "Cinema Communication" of 2001, and extended in 2004 until the end of June 2007 (see IP/01/1326 and IP/04/343). The criteria will apply until at the latest 31 December 2009.

Solutions to be found between now and 2009 will take account of the results from an extensive independent study on the economic and cultural impact of the existing requirements imposed by Member States concerning so-called 'territorialisation', looking in particular at their impact on co-productions. The Commission ordered this study to examine whether the current criteria could still cope fully with the new challenges facing Europe's audiovisual market.

'Territorialisation' clauses in some Member States oblige producers to spend a certain proportion of the film budget in the Member State that grants the aid. The Commission allows Member States to impose such clauses up to 80% of the total film budget. In other words, producers must be free to spend at least 20% of the film budget outside this State without suffering any reduction in the aid. The Commission considers that this is justified to ensure the continued presence of human skills and technical expertise required for cultural creation.

The independent study's preliminary findings will be examined in a workshop in Brussels on 6 July 2007. The final study results are expected at the end of 2007. The outcome of the study and the workshop are important elements for the solutions to be found between now and 2009.


In 2001, after assessing various national film support schemes, the Commission published a Communication setting out the conditions for providing state aid to promote cultural heritage through the production of cinematographic and other audiovisual works. According to the Cinema Communication, state aid was permitted provided it did not affect trade and competition in the Single Market.

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:

  • 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.

In 2006, 926 million cinema tickets were sold in the EU, a 3.6% rise over 2005. European films accounted for 28 % of tickets sales compared with 25% the previous year. 862 films were produced in Europe in 2006, 47 more than 2005.

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