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State aid: Commission consults on support to film sector

Commission Européenne - IP/11/757   20/06/2011

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European Commission - Press release

State aid: Commission consults on support to film sector

Brussels, 20 June 2011 - The European Commission has launched a public consultation as the first step of a review of the criteria used to apply EU state aid rules to Member States' financial support for making and distributing films. The current Cinema Communication is 10 years old. The Commission has published an issues paper identifying areas for reflection, such as competing to attract major film productions using state aid, and supporting activities other than production. The Commission invites interested parties to submit their comments by 30 September 2011.

Commission Vice President in charge of competition policy Joaquín Almunia commented: "Before designing the future state aid rules for this important sector, my colleagues and I want to gather views about what the common European objective of such support should be. 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? Only when we have a clearer picture of issues like these can we begin to develop appropriate state aid rules."

The issues for discussion in the consultation include:

  • competition among some Member States to use state aid to attract inward investment from large-scale, mainly US, film production companies

  • support for aspects other than film and TV production (such as film distribution and digital projection)

  • territorial spending obligations imposed in film support schemes and

  • whether the specific rules on state aid in the audiovisual sector can or should be adapted for new technologies, new creative concepts and changing consumer behaviour.

EU Member States provide an estimated €2.3 billion per year in film support: €1.3 billion in grants and soft loans and €1 billion in tax incentives. Around 80% of this is for film production. France, the UK, Germany, Italy and Spain offer the majority of this financial support.

The Commission's consultation follows the extension of the existing state aid assessment criteria in January 2009 (IP/09/138) until 31 December 2012. The Commission's assessment of aid for film production is currently based on the state aid rules indicated in the 2001 Cinema Communication (IP/01/1326). For other types of support in the film sector, the Commission's assessment often refers to the rules in the Cinema Communication when assessing measures under Article 107.3(d) of the Treaty on the Functioning of the EU, that allows aid of a cultural character.

See Memo/11/428 for questions and answers on the launching of the review.

The issues paper and other information about the public consultation are published at

http://ec.europa.eu/competition/consultations/2011_state_aid_films/index_en.html .

Comments should be sent by 30 September 2011 to: Stateaidgreffe@ec.europa.eu

Background

The current Cinema Communication (see IP/01/1326) 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 Treaty:

  • the aid must comply with the provisions of the 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).

Contacts :

Amelia Torres (+32 2 295 46 29)

Maria Madrid Pina (+32 2 295 45 30)


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