20/05/2012 - The EU is in the process of establishing a law which reduces the subsidies given to non-European productions shot in Europe. The industry is concerned...

The EU is in the process of introducing a bill which proposes to reduce the subsidies given to non-European productions shot in Europe, creating new concerns for the important market of co-productions with member states. These subsidies currently amount to €3 billion a year.

The news came during tha annual event organised by the European Audiovisual Observatory at the Cannes Film Festival. It would be a question of creating a new distinction as to the true European origin of the applicant. At the moment there is now such distinction and non-European productions can apply for the same subsidies as European films if they are being filmed or co-produced with a member state. The European Commission is suspicious of the system being abused, because it has led to competition between certain member states who use public money to attract big, primarily American, production companies. This is notably the case for Great Britain and its €250M+ won for films in 2011 which were largely Hollywood-owned, thanks to its tax credit system. The European Commission fears that these subsidies have a detrimental effect on small European productions, which can no longer be made.

That’s without counting the development of technical equipment and European know-how resulting from this new influx of work which often requires a high level of specialisation. People have been trained, investments have been made, with important repercussions for European competitiveness and its impact on the audiovisual industry worldwide. If this proposal were adopted, it is only to be expected that these industries would locate themselves outside the EU, thus weakening its position, but not the number of films which would continue to be produced elsewhere, with no benefit for the the member states’ industry.

Apart from reducing the amounts allocated, the bill also foresees that 100% of the subsidies be spent in the member state, instead of the current 80%. This represents a further source of concern for industry professionals who are very aware that this would mean the end of co-productions which needed to be made in several different countries, be they entirely European or otherwise.

(Translated from French)