EU adopts new rules on aid to cinema industry

The EU executive on Thursday released long-awaited new rules on state aid for film-making which are likely to satisfy Europe's influential cinema industry. The rules set out how much state aid a film can receive and how much of that aid must be spent in the country providing the budget support. Despite fears the European Commission would lower the limits, thus harming local industries and economies, the new rules remain largely in line with former ceilings. Aid will continue to be limited to 50 percent of the production budget but the ceiling will rise to 60 percent for co-productions funded by several member states. Governments putting funds into the film industry will also continue to be allowed to demand that recipients across the audiovisual sector spend a certain percentage of the cash in their country. This bending of the single market rules "is justified by the promotion of cultural diversity which requires the preservation of the resources and know-how of the industry at national or local level," a Commission statement said. Governments can also condition aid to up to half of the production budget taking place on their territory. EU nations provide around three billion euros ($4 billion) a year in film support -- two billion in grants and soft loans, the remainder in tax incentives. France, Britain, Germany, Italy and Spain are the largest providers of aid to their film makers who complain that they are at a major disadvantage compared to the huge resources the US industry can command.