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IP/08/1580

Brussels, 24th October 2008

State aid: Commission consults on three year extension of film support criteria

The European Commission has launched a public consultation on plans to extend the state aid assessment criteria of its Cinema Communication (see IP/01/1326) until 31 December 2012. Under the current criteria, state support for film production can be exempted from the EC Treaty's ban on state aid under certain conditions. In particular, such support must concern cultural films, while respecting certain thresholds regarding territorial requirements and aid intensity. Schemes must also comply with the EC Treaty rules and cannot focus on specific film-making activities. The Commission proposes to extend the validity of these criteria for three years and invites interested parties to submit their comments by 30 November 2008.

Competition Commissioner Neelie Kroes commented: "European citizens want to be able to watch a wide choice of films. The additional three years for which we propose to maintain the existing state aid rules should offer a welcome assurance to Member States and the film sector. At the same time, we would like to kick-start a debate across Europe about whether European citizens are getting the choice of films they want and, if not, why not."

Information Society and Media Commissioner Viviane Reding said: "For Europe, cultural diversity is more than just one policy objective. It is a value inherent in the social model that made Europe special in the world. This is why the Commission is suggesting to extend the existing rules on state aid for cinema productions until the end of 2012. This should give legal certainty to film producers across Europe and spur another round of creative audiovisual productions made in Europe. I am sure that further Oscars are in the pipeline for Europe's cinema in the years to come."

The Commission's consultation follows the joint declaration by Commissioners Kroes and Reding in May 2008 (MEMO/08/329). It takes into account the results of an independent study into the economic and cultural impact of territorial spending obligations that are often part of national film support schemes. The Commission's assessment of aid for film production is currently based on the criteria laid out in the 2001 Cinema Communication (see IP/01/1326). For the other types of support, the Commission assessment refers to the rules in the Cinema Communication in applying Article 87.3(d) of the EC Treaty that allows state aid to promote culture provided it does not adversely affect trade between Member States.

The proposed text of the extension is published on the Commission website http://ec.europa.eu/comm/competition/state_aid/reform/reform.cfm. Comments should be sent by 30 November 2008 to the following mailbox: Stateaidgreffe@ec.europa.eu.

Background

The Cinema Communication sets out the following criteria for state aid of this kind to benefit from the cultural exception to the general ban on state aid in the EC Treaty:

  • the aid must comply with the provisions of the EC Treaty (e.g. it must not affect the internal market)
  • the aid must be directed towards a cultural product. Each Member State must ensure that the content of the aided production is cultural according to verifiable national criteria (applying the subsidiarity principle)
  • the producer must be free to spend at least 20% of the film budget in other Member States without suffering any reduction in the aid provided for under the scheme
  • the aid intensity must in principle be limited to 50% of the production budget, except in the case of difficult and low budget films
  • the aid must not provide supplements for specific filmmaking activities (e.g. post-production).

The report of the study on the economic and cultural impact, notably on co-productions, of territorialisation clauses of state aids schemes for films and audiovisual productions is available at:

http://ec.europa.eu/avpolicy/info_centre/library/studies/index_en.htm#finalised

Across Europe, an estimated €1.6 billion is spent on national film support each year. This mainly takes the form of direct grants or tax incentives. Around 70% of the support is focused on film production. There is also support given at European level through the MEDIA programme and by the measures on the promotion of European works in the Audiovisual Media Services Directive. The European MEDIA 2007 programme (2007-2013) has a budget of €755 million. It supports the development and distribution of films as well as training activities, festivals and promotion projects throughout the continent.


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