Strong concerns of the European film industry over the European Commission’s “Cinema Communication” draft

Paris, 31 July 2013

More than 80 public authorities, professional film organizations, and individuals "submitted contributions to the EC public consultation on State aids to audiovisual and cinematographic works, that was launched on April 30th this year".

A large number of these contributions focused on the Commission’s project to drastically limit the to drastically limit the link between public aid and the territory of the national or local aid-granting authority.

While the current rules (2001 Cinema communication)allow Member States to require a producer benefiting from funding to spend up to 80% of the film’s total budget on its territory, the new draft, should it be adopted, would on one hand considerably reduce this possibility, and on the other hand would end up with an empty shell since aid would no longer be  conditional to the use of local resources

The EC new approach to territorialisation rules is disproportionate. It would prevent Member States from pursuing their cultural policy objectives and disregards the fact that in order to achieve these objectives the Treaty (and its interpretation by the European Union Court of Justice foresees the possibility for departing from the strict application of competition and internal market rules ),

The consequences of these new rules would be very negative for the entire European film and audiovisual industry, supported in the Member States by public aid schemes, which are critical to ensuring funding and diversity of creation.

In its contribution, Germany considers the Commission’s proposals regarding territorialization to be inappropriate. These proposals are incompatible with the country’s fiscal aid measures, which were authorized several times by the Commission. They constitute an unacceptable interference in the right of Member States to independently determine the means of achieving their cultural policy objectives. Germany asks the Commission to find a better balance between internal market regulations and the “cultural derogation” provided for by the Treaty, in order to account for the specificities of the audiovisual creation sector.

According to Belgium,  should public authorities no longer be guaranteed any return on investment, they would either cease contributing funds to the sector, or implement “implicit territorialization” clauses which will go against the objectives of transparency and legal certainty sought by the European Commission and necessary to the profession.

The British Film Institute (United Kingdom) emphasizes the risk of weakening the audiovisual sector on the continent and, as a result, in the United Kingdom due to the negative impact of the new rules on intra-European co-productions. It favors the application of the principle of subsidiarity rather than the imposition of a single rule by the Commission. Above all, the United Kingdom regrets the absence of an “impact assessment from the Commission which models the effect of its proposals on the number, range, and value of European production and associated employment, and on Europe’s cultural diversity.”

More broadly, all of the national film agencies in Europe are unanimous in their criticism of these proposals, and require the possibility of establishing a real link between funding and the aid-granting territory.

Finally, the European Coalitions for Cultural Diversity deem that the Commission is not sufficiently considering the uniqueness of the audiovisual sector, though it has been recognized by both the UNESCO Convention of 20 October 2005 on the protection and the promotion of the diversity of cultural expressions (ratified by the European Union and all of its Member States), and by articles 167.4 and 107.3 d) of the Treaty on the Functioning of the European Union.

The negative impacts of such a reform have therefore caused strong and widespread concern. Numerous contributions emphasize that the mechanisms in effect today do not detract from the dynamic of the film and audiovisual sector in Europe and ask that, in the absence of a sound assessment of the impact of the proposed change, the rules of the game that have been in effect for the last 12 years remain unmodified.