One of the major talking points at this year's Babelsberg 2001 film and TV production conference, is how to produce and market European films for the international market (Local Stories for Global Markets, Aug 28).

It is a problem that plagues most international film-makers and for which there is no simple solution. Break-outs of the past decade - such as The Full Monty, Four Weddings And A Funeral and even Strictly Ballroom - have been in the industry's lingua franca of English, with Italy's Life Is Beautiful and Hong Kong's Crouching Tiger, Hidden Dragon two of the few foreign-language blockbusters with a gross of more than $200m worldwide.

Films such as France's Amelie and Germany's Run Lola Run can be classified as international arthouse successes. What they all have in common is a strong story coupled with an intangible x-factor, which no Hollywood star, co-production agreement or hefty budget can ever guarantee.

Despite the column inches and the accolades for the Danish Dogme movement, the back-to-basics revolution failed to scale the walls of global multiplexes, and the series has remained resolutely arthouse. In fact, the Dogme titles, like most other Scandinavian films, do not resonate with audiences much beyond their home territory.

But what Dogme did do was alert the international film industry to the hotbed of talent in the region. Danish production powerhouse Zentropa, whose CEO Peter Aalbeck Jensen, another speaker at the co-production conference, is now developing an English-language film called Dogville. It is not its first, following Breaking The Waves and Dancer In The Dark, but it is the first to which director Lars von Trier has attracted an A-list star in the shape of Nicole Kidman. The company also has a three-picture deal with Fine Line and Istituto Luce, as well as a separate deal for a slate of English-language thrillers with USA Films and Concorde Films.

Much like Hollywood's colonisation of the UK film industry in the wake of the global success of Four Weddings And A Funeral and The Full Monty, US financiers in particular have grown wise to the potential of (usually) low-budget, indigenous film-making, even if the projects are mainly geared to the local market.

In Brazil admissions are soaring, propelled by a new generation of dynamic young film-makers tempting audiences back to local cinema. Brazilian films grabbed 10% of the market last year - a far cry from the heyday of the late 1970s and early 1980s when they took a 30% share - but encouraging nevertheless. Columbia TriStar, 20th Century Fox and Warner Bros have all forged production agreements with local players: Globo, Total Filmes and Conspiracao respectively.

"We are not ruling out the idea of eventually co-producing Brazilian films ourselves," said Jorge Peregrino, vice president of UIP Latin America, just before Cannes this year.

In Europe, France boasts such deep-pocketed broadcasters and a generous public support system that it can fully finance its own blockbuster films: UGC's $10m Amelie has so far grossed nearly $50m at home alone. All the US studios want a piece of the action, but prior to the Universal-StudioCanal merger, Warner Bros had secured a real foothold.

"It appeared to me that it was impossible for Warner Bros to be in France - a country whose film industry is so dynamic, where local films regularly hold on to a 30%-40% market share - without being involved in local production," explains Francis Boespflug, head of Warner Bros France. "In order to do so you have to discover talents, which takes time and risks."

The company also has a production arm in Germany. Indeed, German films may not travel, but unlike UK films, at least the locals like them, a point not missed by the studios. Buena Vista Filmproduktion was the first to arrive in 1996 and scored a hit with its first feature, Knockin' On Heaven's Door. The film was a co-production with Mr Brown Entertainment, the company run by one of Germany's biggest stars, Til Schweiger. Warner Bros followed suit, sealing deals with Munich Animation, Knockin' director Thomas Jahn and Studio Hamburg Letterbox.

Additional reporting by Martin Blaney, Anna Marie de la Fuente and Francoise Meaux Saint Marc.

Article abstracted from this week's Screen International