The Commission adopted a Communication extending until 31st December 2009 at the latest the application of the current rules on state aid to cinematographic and other audiovisual works. This Cinema Communication extends the rules laid down in the previous Communications of 2001 and 2004. This continuity should further encourage Europe's audiovisual industry by maintaining the current conditions and thereby helping the industry to face future challenges in a highly competitive market.
The extension decided today means that the Commission will continue to apply the current criteria for assessing the compatibility of Member State's aid schemes with state aid rules as initially set out in the so-called "Cinema Communication" of 2001, and extended in 2004 until the end of June 2007. The criteria will apply until at the latest 31 December 2009.
Solutions to be found between now and 2009 will take account of the results from an extensive independent study on the economic and cultural impact of the existing requirements imposed by Member States concerning so-called 'territorialisation', looking in particular at their impact on co-productions. The Commission ordered this study to examine whether the current criteria could still cope fully with the new challenges facing Europe's audiovisual market.
'Territorialisation' clauses in some Member States oblige producers to spend a certain proportion of the film budget in the Member State that grants the aid. The Commission allows Member States to impose such clauses up to 80% of the total film budget. In other words, producers must be free to spend at least 20% of the film budget outside this State without suffering any reduction in the aid. The Commission considers that this is justified to ensure the continued presence of human skills and technical expertise required for cultural creation.