09/07/2007

Over 400 film industry professionals from across Europe attended a conference held on Friday by research consultancy Cambridge Econometrics on the draft of the study on "The Impact of the Territorialisation Clause of State Aid Schemes in the Audiovisual Sector".

Industry representatives present at the event unanimously rejected the conclusions of the study, pointing out major methodological errors, a lack of clarity about data collection and doubts concerning sources.

On behalf of the European Film Agency Directors (EFAD), Roland Teichmann expressed the concerns of national agencies responsible for audiovisual services in the EU Member States. Questioned by Cineuropa, Mr Teichmann said that the study "could under no circumstances give rise to relevant conclusions on the effectiveness of the territorialisation clause".

Representing the European Producers Club, Jean Cazès pointed out that the most inefficient State aid schemes were those that had no territorialisation clause, the UK’s Sale & Leaseback scheme and the German tax credit system in practice a few years ago, which resulted in the transfer of several billion euros to Hollywood productions. Both schemes have since been abolished.

It was the intervention by Istvan Szabo that left the strongest impression, however. "If the film industry of countries with a small market is not allowed to benefit even from their own taxpayers’ support, it will slowly die. The lack of a national culture slowly turns into a political force and this political force becomes anti-European. Have you ever analysed why certain countries don’t support the European constitution? Because they feel their own culture is being threatened," said the director. (Click here full text in English.)

The Commission sets the legal framework for the compatibility of national state aid systems with Community law. The general and specific compatibility criteria are defined in the so called “Cinema Communications”, dating from September 2001 and valid until the end of 2009 (at the latest). State aid schemes to cinema and TV programme production are authorized on the basis of the culture derogation of Article 87(3) d) of the EC Treaty where such aid does not affect competition and trading conditions to an extent contrary to the common interest. The 'Cinema Communication' establishes the criteria which the Commission should verify when assessing the scheme i.e (1) the general legality criterion and (2) specific compatibility criteria, one of which being that the producer must be free to spend at least 20% of the film budget in other Member States without suffering any reduction in aid (territorialisation clause).

The study examines in particular the economic and cultural impact of the territorialisation requirements imposed by Member States, in particular taking into account their impact on co-productions. The results of the study and the workshop are important elements for the solutions to be found between now and 2009. The preliminary final report was published as a 'work-in-progress' in advance of the workshop to invite film professionals to provide feeback and correct errors and omissions before it was finalized by the end of 2007.

(Translated from Italian)