WRITTEN QUESTION P-3173/00 by Valter Veltroni (PSE) to the Commission. Measures to restrict the support arrangements for film and television production and distribution.
Date: 2000-10-04
Institutions: European Parliament, Provisional data
Subjects: State aid, aid system, cultural policy, film industry, film production, production aid

C 163 E/50

Official Journal of the European Communities

EN

6.6.2001

(2001/C 163 E/049)

WRITTEN QUESTION E-3168/00

by Theresa Villiers (PPE-DE) to the Council

(16 October 2000)

Subject: Cyprus and the Loizidou case

1. Will compliance with the judgment of the European Court of Human Rights in the case of Loizidou
v. Turkey be a condition laid down in the EU(cid:146)s accession partnership agreement with Turkey?

2. Will any reference be made to Cyprus in the EU(cid:146)s accession partnership agreement with Turkey?

3.

In the opinion of the Commission, has Turkey, since the Helsinki Summit, made any progress:

(a)

towards fulfilling the Copenhagen criteria, and

(b)

towards complying with the preconditions laid down in the communique issued by the European
Council in Helsinki?

Reply

(26 February 2001)

The Honourable Member will note that the Council registered political agreement to the accession

1.
partnership with Turkey and the relevant framework Regulation at its meeting on 4/5 December 2000.

In so doing, it recalled the terms of the Helsinki European Council conclusions as regards the criteria to be
met by all candidate countries.

2.
The Council would remind the Honourable Member that it cannot formally adopt the framework
Regulation until such time as the European Parliament has delivered its Opinion, which it is expected to do
in February 2001.

(2001/C 163 E/050)

WRITTEN QUESTION P-3173/00

by Valter Veltroni (PSE) to the Commission

(4 October 2000)

Subject: Measures to restrict the support arrangements for film and television production and distribution

At the recent seminar held at the LumiŁre Institute in Lyons on 11/12 September 2000 under the auspices
of the French Presidency, the Commission Directorate-General for Competition, represented by one of its
officials,
formally announced the future assessment criteria applying to national support systems to
promote the film and audio-visual industry. The criteria will apparently be as follows: 1. the State aid
granted to any work may not exceed 50 % of the total; 2. a producer will be obliged to invest at least 20 %
of the funding outside national territory. Furthermore,
it seems that the concept of State aid is being
interpreted in such a way as to cover every investment undertaken by the State, and hence including even
the investment requirements that might be imposed on public-service corporations by law, with the result
that investment in that category will be taken into account when calculating the total amount of aid
subject to the 50 % threshold.

These measures, if they were in fact to be implemented, would pose a serious danger to the European film
and audio-visual industry, which is already in difficulty, especially in small countries constituting national
markets and language areas of limited size. What is at stake, therefore, is the future of European culture

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Official Journal of the European Communities

C 163 E/51

and the policy in support of cultural diversity in the Union. An approach along the lines described above,
moreover, is inconsistent with the repeated assertions that the audio-visual sector is strategically important
both for economic development in general and for European cultural policy.

In the light of the foregoing, can the Commission confirm the formal statements by its official and say
what it will do to ensure that the audio-visual sector is recognised for the purposes of the single European
market specifically as a cultural industry, following the precedent already set at international negotiations?
In particular, will it accept the obligations laid down by law to invest in the production of audio-visual
works and make exceptions to allow for the intrinsic language implications of national audio-visual
markets, bearing in mind that the sector in question has a key role to play in safeguarding and fostering
Europe(cid:146)s diverse identities and cultures?

Answer given by Mr Monti on behalf of the Commission

(30 November 2000)

The Commission feels that promoting culture is an important objective. Although the articles in the
EC Treaty relating to State aid cannot be an instrument for that purpose, the Commission is mindful of
that objective when applying them.

Since the exemption from Article 87 (former Article 92(3)(d)) of the EC Treaty in favour of aid to culture
was introduced, the Commission has been able to make a distinction between aid to culture and aid to
industry. In 1998, for instance, it approved the French film production support scheme (N 3/98). In that
decision, it set out for the first time the criteria it intended to use to evaluate compatibility of aid in those
sectors and to authorise existing aid schemes in the Member States under the exemption. The Commission
applies the same rules and principles in all its decisions on state aid for films and television production.

To be eligible for the exemption from Article 87(3)(d), support for films must be culturally oriented, that is
to say, aid must go to a specific cultural product, therefore to a film; the producer must be able to spend
at least 20 % of the total budget of the film in other Member States without any loss of aid; maximum aid
intensity is basically limited to 50 % of the total budget of the film, except in the case of difficult and low-
budget films; any bonus, that is to say any extra aid for a specific technical audiovisual production service,
is ruled out.

Some Member States make aid conditional on the utilisation of a percentage of the budget in their country
(local content rule). That condition applies broadly, without any cultural considerations. The application of
the specific compatibility criteria reduces its discriminatory effect. It ensures that part of the risk is borne
by the producer, and it prevents Member States from outbidding each other to attract or keep technical
audiovisual production services in their own country.

As well as opening up markets, the application of the specific compatibility criteria is highly beneficial to
small and medium-sized Member States in particular, since it helps create a Community cultural area
without frontiers by reducing the atomisation of the film production market.

The smaller Member States tend to have less of a cultural impact and their cultural products consequently
have a much smaller share of the Community market; it is therefore quite possible that the 50 % limit on
aid intensity might cause problems when their aid schemes are examined. However, the Commission could
envisage an additional exemption from this rule if it felt that strict application would be incompatible with
the development and cultural creativity in those Member States or in certain areas. If the local content rule
was confined to what is needed to preserve the minimum industrial fabric needed for cultural activities
such as film production, consideration could be given to aid intensity above the 50 % threshold. Here, the
French decision of 1998 already contained an exemption for difficult and low-budget films.