In March, the Socialist party ousted the ruling PopularParty in a surprise upset in Spain's national elections. Thepredominantly left-leaning film industry was jubilant with the win, temperedonly by the fact that it was preceded three days earlier by a series of deadlyterrorist bombs set off on commuter trains in Madrid.

The Socialists had promised to prioritise culture, inparticular cinema, and they made good with a fast 89% increase to the nationalCinema Protection Fund (Fondo de Proteccion) and July legislation regulatingbroadcasters' investments in Spanish and European film.

Overheard this year

'It is striking, an honour and unique... amilestone.' Pedro Almodovar on his Bad Education (La Mala Educacion) being the first Spanish film ever invited toinaugurate Cannes.

Breakthrough talent

Paz Vega sealed her box office appeal at home on the back ofCarmen and ensemble comedy TheOther Side Of The Bed. She is now poised totake over from Penelope Cruz as the Spanish star of the moment with her firstUS role, as the third lead in James L Brooks' Splanglish. Vega will also be seen in Spain in 2005 inSony's first local-language production in Spain, local box office hit SayI Do (Di Que Si).

Box office snapshot

Highest-grossing film: Shrek 2 (UIP) $37.8m

Highest-grossing art-house film: The Passion Of TheChrist (Aurum Producciones) $15.5m

Highest-grossing local film: The Sea Inside (Warner Sogefilms) $24.1m