EU extends state aid rules for film industry

(BRUSSELS) - The European Commission on Wednesday extended rules allowing member states to support filmmakers with public money in the face of an onslaught of popular American movies.

With current arrangements due to expire at the end of the month, the European Union's executive arm decided to extend the rules until the end of 2009.

"Our aim is to ensure that state aid control continues to ensure optimal and equal conditions for artistic and cultural creation," said Competition Commissioner Neelie Kroes.

Led by France, many member states have long sought to hold back a flood of mostly US-made films, which are often highly popular with the European public, by promoting European productions with subsidies.

According to the Commission, 926 million cinema tickets were sold last year in the EU, a 3.6 percent rise over 2005. European films accounted for 28 percent of ticket sales compared with 25 percent the previous year.

Under rules dating from 2001, member states can finance up to 50 percent of a film's budget as long as the production is deemed to be a "cultural product, although more money can be provided if the film is considered "difficult" or has a low budget.

A member state can also require a film company to spend 80 percent of a film's budget in its territory if the enterprise wants to receive public subsidies.

Cinema: EU regulatory framework