German chancellor Gerhard Schroeder announced the creation of a German-French film academy today at the Berlin film festival.

While the chancellor disclosed neither the budget nor the location of the proposed institution, he said it would address the cultural and economic needs of the industry.

At a conference attended by French culture minister Catherine Trautmann and German culture minister Michael Naumann, Schroeder said: 'the objective is to overcome the obstacles that European films have to face, when faced with a greater economic power'.

But Schroeder was careful to insist that this is not a measure taken against the US, but rather one in favour of European cinema.

According to Trautmann, the establishment of an academy must be complemented by measures to improve distribution and promotion of European films.

A group of experts drawn from the film industry is now being assembled to advise on the specifics.