The international business was looking robust again for the first time in a long time, but rumblings over the future of the MEDIA programme cast a pall over the future health of European public funding.

The flurry of dealmaking at Sundance this year sparked up an optimism in the marketplace which continued through Berlin. The apparent return of big-spending US buyers was apparently responsible for the boost and one equity financier said that he would now apportion 5% of a budget against the US deal now, when a year ago it was a big fat zero.

While the Berlinale is hardly a destination for studio buyers to spend millions, some specialized US distributors were pre-buying with zeal. At EFM, Magnolia bought a package of three films from TrustNordisk including Lars Von Trier’s Cannes-bound Melancholia and a forthcoming film of Jo Nesbo’s bestseller Headhunters; ATO Pictures stepped up to buy Pawel Pawlikowski’s The Woman In The Fifth; Sony Pictures Classics took Agnieszka Holland’s In Darkness off the market and Megan Ellison’s Annapurna Productions acquired US rights to Wong Kar-wai’s The Grandmasters with a view to closing its own distribution deal later.
Producers and sales agents were fielding bigtime domestic offers for films like Daniel Radcliffe-starrer Woman In Black or Madonna’s WE but were in no hurry to close, while the P&A commitments being promised by distributors were bigger and better than last year.
The knock-on effect that a healthy domestic market generates that could see a flurry of new investment and stability in the international production environment. Now that bidding wars are coming back into fashion, that 5% against US can only increase.
But it wasn’t a rosy picture in all areas of finance this week. The alarming news broken in Screen that the European Union’s MEDIA programme was under threat and might be severely scaled back or merged with another community programme as early as 2013. The programme has a budget of €755m from 2007-2013 and is a crucial factor in the development and distribution of European films.
A meeting of the continent’s national film agencies immediately issued a common declaration this week, calling on the European Commission “to preserve the specificity and strengths of the MEDIA Programme by maintaining its autonomy and providing it with the appropriate budget which will enable it to work efficiently and effectively.”
One sales agent and territorial distributor told me that his entire business would be undermined without the support of MEDIA, and that the circulation of European films would be hit disastrously should the current system not be sustained.
Berlin also saw newly named Hungarian film tzar Andy Vajna face his industry to answer initial questions about how he planned to confront the funding crisis in the country. Vajna pledged that the government would honour its co-production obligations and that a longterm strategy would be worked out in the wake of the virtual collapse of the Hungarian Motion Picture Fund.
On the eve of Berlin, some of Hungary’s leading film-makers had been joined by international names like Haneke, the Dardennes, Assayas, Egoyan and Angelopoulos in condemning the appointment of Vajna as “a single-person decision-making system” and expressing fear that the plurality of cinema in Hungary would suffer as a result.
Vajna seemed to be approaching the funding conundrum more as a question of restructuring and reorganizing. The notion that he would try to compromise the integrity of Hungary’s film voices didn’t raise much discussion at the meeting. It’s probably the last thing on his mind right now.
Hungary is not the only country imposing new austerity measures. The UK is still in the process of its own belt-tightening restructure and the threat to federal film support has been voiced in countries across Europe, not to mention the US state tax incentives which have revitalised the US independent sector. Meanwhile the battle for MEDIA is just beginning.

At an EFM where signs of recovery were brightening the private finance and distribution arena, the “soft money” sector is facing hard times ahead.