The European Commission has launched a public consultation as part of a review of the criteria for assessing the compatibility of national, regional, and local film and audiovisual support schemes with European Union state aid rules.

These criteria were set out in the Commission’s 2001 Cinema Communication whose validity had been extended three times, most recently in 2009, when it was announced that new rules on state aid to cinematographic and other audiovisual works would come into effect by 31 December 2012, at the latest.

In the 2009 extension, the Commission identified a number of different trends that would require “some refinement” in a review of the state aid rules. “These trends include support for aspects other than film and TV production (such as film distribution and digital projection), more regional film support schemes, as well as competition among some Member States to use state aid to attract inward investment from large-scale, mainly US, film production companies.”

The issues paper published today as part of the public consultation is thus the first step towards completing a review of the state aid rules by the end of 2012.

Speaking in Brussels about the issues to be discussed in the consultation, Joaquin Almunia [pictured], Commission Cice President in charge of competition policy, declared: “Before designing the future state aid rules for this important sector, my colleagues and I want to gather views about what the common European objective of such support should be. For example, does a subsidy race to attract major US productions undermine the effectiveness of aid to support smaller European films? Does the scope of our rules need to go beyond encouraging the production of more films? And is support needed to encourage filmmakers to explore the possibilities of the digital revolution? Only when we have a clearer picture of issues like these can we begin to develop appropriate state aid rules.”

Moreover, the Commission noted that “the State aid rules which succeed the Cinema Communication will need to cover a situation which is rapidly evolving in view of changing consumer preferences and technological developments. The same will be true for the support provided from 2013 onwards by the successor of the Commission’s current MEDIA Programme.”

Comments on the Commission’s so-called issues paper are invited from interested parties during a three-month consultation period ending on Sept 30, after which date all responses will be published, possibily in summary form, in October unless the author objects to being identified publicly.

A public consultation on a draft Cinema Communication is then scheduled to run from December 2011 to February 2012, followed by the publication of this consultation’s responses in April 2012 and the adoption of a new Cinema Communication in the second half of next year.

The European Union’s Member States annually provide an estimated €2.3bn in film support, comprising €1.3m in grants and soft loans and €1bn in tax incentives.