Ciudad de la Luz to give back €265m to the Community of Valencia
by Sergio Ríos Pérez
09/05/2012 - The Ciudad de la Luz film studios, open in Alicante since 2005, are to return the €265m that the Community of Valencia invested in them, has ruled the European Commission. The decision is the result of the commission’s investigation into the possibility that the regional government’s investment constituted illegal public funding, as in the end decided by Joaquín Almunia, in charge of Competition at the commission.
The investigation concluded that “no private investor would have accepted to invest under the same terms” and that the Valencia government’s funding “enormously distorted competition between Europe’s main film studios”. The European Commission launched the investigation in 2008, after two non-identified European companies from the film sector lodged official complaints (read more).
“Not only is it not necessary to spend public money to fund a new operator in the film sector, but it also penalises existing studios as well as people interested in entering the market who have to operate without public funding,” stated the European Commission’s communiqué. “In the current economic climate, the consequences could be disastrous.”
According to the ruling, against which the president of the Community of Valencia Alberto Fabra will appeal, the studios have four months to give the money back. Added to its great debt (about €190m), the many legal procedures it has become involved in, and its commercial deficit, the ruling looms like “an iceberg” (the words of its director general José Antonio Escrivá) in the path of the Titanic that Ciudad de la Luz has become.
(Translated from Spanish)