The European Commission today kicked off a year of negotiations between film-makers and law-makers when Viviane Reding unveiled a three point plan for reform. Her main objectives are the rationalisation of national film support systems, new protection for film heritage and a reworking of tax systems.

Reding, commissioner for culture and education, said that improvements to the distribution of European film represent the third step in her programme to help the film industry. It is to come after the creation of the MEDIA Plus programme and the involvement of the European Investment Bank as a financier of structural projects, both of which she has secured in the last year.

Reding said that, far from being replaced by influxes of private capital, national subsidy and aid systems would continue to be essential to European cinema. But she said that they need to be "channelled" so that they all work in harmony with the Treaty Of Europe.

Answering questions after her speech at the Venice film festival, Reding said that she anticipated the level of national aid for a film to be limited to a maximum of 50% of its production costs. That would still leave a place for other kinds of aid, such as Eurimages' support for distribution, and that there would be "cultural exceptions." "In the case of a difficult film made with a small budget and with only a limited market potential," there would be room for more aid, said Reding. She gave the example of a film made in the minority Luxembourg language.

To ensure longevity of European film, Reding put forward plans to develop a European film registry system, a film deposit centre akin to a cinematheque, a film database and increased use of the internet for distribution. To avoid ownership disputes new legal definitions might need to be put in place. Reding said that European films should not be left out of the internet revolution and that satisfactory legal solutions can be found to protect them from copyright abuse.

Together with the commissioner for competition, Mario Monti, Reding is proposing a re-examination of two aspects of taxation; support and expansion of fiscal incentives to film investment, and second, a reduction in value added tax. Taken together she said the three planned reforms would help redress Europe's Euro7bn annual film trade deficit with the US and second improve the efficiency of the European market for film.

Other measures include harmonisation of Europe's many systems of film classification (ratings), the use of definition according to content rather than the medium and an ongoing examination of national film regulatory systems. The Commissioner said that she saw the reforms as also helping to put in place the treaty that would replace the current Television Without Frontiers Directive.