IP/09/138 Brussels, 28 th January 2009 State aid: Commission prolongs film support rules until end 2012 The European Commission has today adopted a Communication extending the validity of the state aid assessment criteria for the production of films and audiovisual works until 31 December 2012. These criteria, laid down in a Commission Communication of 2001, are used by the Commission to approve Europe’s national, regional and local film support schemes under the EU's state aid rules. The new Commission Communication also identifies a number of trends which are likely to have to be addressed by a future Cinema Communication. Across the EU, around €1.6 bn is spent on national film support each year. Competition Commissioner Neelie Kroes said: “European Cinema is one of the cornerstones of European cultural expression. Its importance is recognised by the EU's competition rules and by state aid control in particular. I am delighted to be able to continue to endorse Member States' support of European films with the extension of the Cinema Communication. Our rules are the proof that competition and culture can live together very well and make each other stronger.” "The great success of the best European film of 2008, the Italian 'Gomorra' shows the vigour of European cinema which is able to travel and be successful across borders" said Viviane Reding, EU Media Commissioner. "For European creators to express themselves, they need a stable environment for the film industry. This is why we are reconfirming today the Commission's current approach to national aid to cinema for another three years. The European audiovisual industry is facing new challenges in rapidly evolving markets. This is why we must also launch a debate to find ways of turning these challenges into opportunities, in particular in better using the Internal Market dimension and in looking beyond Europe's borders. The recent Commission proposal on MEDIA Mundus, a programme of cooperation between European film professionals and professionals from emerging countries, goes into this direction" (see IP/09/26 ). With today's decision, the Commission will continue to apply the criteria of the 2001 Cinema Communication (see IP/01/1326 )) for assessing the compatibility of Member State's aid schemes with the EC Treaty state aid rules until 31 December 2012, at the latest. These criteria had previously been extended in 2004 and 2007 (see IP/04/343 and IP/07/820 The more recent trends identified in today’s Communication include support for aspects other than film and TV production (such as film distribution and digital projection), more regional film support schemes, as well as competition among some Member States to use State aid to attract inward investment from large-scale, mainly US, film production companies. These trends might lead in due course to a refinement of the state aid criteria. However, as these are complex issues, the Commission wishes to reflect on this with the Member States, with film support bodies and with the European film industry. Background The Commission's 2001 Cinema Communication set out four specific compatibility criteria according to which aid for the production of films for cinema and TV can be approved as cultural aid in accordance with Article 87.3(d) of the EC Treaty, as well as requiring compliance with the general legality principle. These criteria are that: aid must benefit a cultural product the producer must be free to spend at least 20% of the production budget in other Member States without suffering any reduction in the aid provided for under the scheme as a result of territorial spending obligations the aid intensity in principle must be limited to 50% of the production budget, except for difficult and low budget films, and aid supplements for specific film-making activities are not allowed. The validity of these criteria was due to expire on 31 December 2009. Following a public consultation on this matter launched in October 2008 (see IP/08/1580 ), the Commission decided today to extend the validity to 31 December 2012. The EU itself supports Europe's film sector via the MEDIA 2007 programme which provides, for the period 2007 to 2013, €755 million for training and for the development and distribution of European films across borders (see IP/07/169 ). 9 out of 10 European films are shown outside their country of production thanks to MEDIA support. For further details, see MEMO/09/33 .