The EU has started the process to review the rules on how member states can grant state aid to lure mainly large American companies to partially or fully produce feature films in European locations.
Brussels said that after 10 years it was time to review the criteria used to apply EU state aid rules to member states’ financial support for film production and distribution.
The news comes as Malta is hosting Brad Pitt and Angelina Jolie, one of Hollywood’s most powerful couples in the film industry, for the production of World War Z that is expected to pump about €30 million in the Maltese economy.
Film production in the EU is big business with almost all member states offering some form of financial incentives to attract the multibillion Hollywood film industry from across the pond.
Member states provide an estimated €2.3 billion a year in film support: €1.3 billion in grants and soft loans and €1 billion in tax incentives. About 80 per cent of this is for film production. France, the UK, Germany, Italy and Spain offer the bulk of this financial support.
Malta joined the club a few years ago, establishing a Film Commission and introducing incentives such as tax rebates and credits. This lured major American film production companies to Malta.
In a dossier released for public consultation, before making formal legislative proposals, the Commission identifies areas for reflection such as competing to attract major film productions through state aid.
Brussels is also asking member states whether territorial spending obligations imposed in film support schemes should be changed and whether specific rules on state aid in the audiovisual sector can or should be adapted to the latest technologies, creative concepts and changing consumer behaviour. At present, EU schemes are based on the Cinema Communication, released in 2001, which sets out different criteria for state aid including the need to comply with the provisions of the EU Treaty and not affect the internal market.