With the Athens 2004 Olympic Games fast approaching, a palpable sense of excitement is growing around the event in Greece - as well as a scramble to get the country's athletics and transport infrastructure ready in time.

Greek film-makers, however, could be forgiven for being less than happy at the prospect of the Games.

Many attribute a recent drying up of government film funding to the ever-growing demands of the Olympic organising committee - which is supervised and funded through the same culture ministry responsible for funding Greek film.

The lack of funding has hit funding body The Greek Film Centre (GFC) hard, as well as other film-related institutions, among them the Thessaloniki International Film Festival and the International Short Films Festival in Drama.

The GFC is the main backer of local film production thanks to an annual $9m (Euros 8m) budget provided by the culture ministry.

At its annual meeting at the end of June, the GFC's president and CEO Diagoras Chronopoulos said: "The GFC is not able to proceed with any more funding allocation for production unless the regular cashflow from the ministry is re-established."

Behind such a dramatic statement lies the fact that the GFC has so far received only $1.2m out of the $5.9m allocated by the ministry as this year's film subsidy. It is only thanks to the $3.4m tax return from cinema admissions that the Centre has been able to operate and co-produce during the first half of 2003.

The organising committee for the Olympic Games, meanwhile, has an extraordinarily generous budget: $2.2bn.

Haris Papadopoulos, president of the Greek Film Directors' Guild, told Screen: "I find it revolting that Greek cinema, to my knowledge the best and most efficient ambassador for Greek culture abroad, sees its already modest financial backing by the state at the point of extinction. I cannot understand why there are plenty of funds for the Olympics and just pennies for the film industry. Film directors feel utterly distressed about it."

Yiannis Bacoyannopoulos, counsellor to the minister for cinema affairs, told Screen that the culture ministry has not been allowed by the finance ministry to ring-fence government funding for the film industry. "This would guarantee, as is the case with national theatres, the opera house and the national orchestra - who are included in the state budget - a regular cashflow. Instead the culture ministry has to scratch in its own internal budget to secure funds directed to the film industry".

Currently the bulk of the 20 or so local films in production are suffering from the GFC's lack of cash, but there may be a ray of hope: the private sector seems to be stepping into the vacuum.

Village Roadshow Hellas, the market leader in local film exhibition thanks to a considerable investment in multiplexes and a key distributor through Village Warner, has created Village Roadshow Productions. Its first venture, Tasos Boulmetis' A Touch Of Spice starring George Corraface, is currently in post-production. The fact that the company chose to back an art film in spite of its considerable budget (by Greek standards) of $1.7m bodes well for the long-term intentions of Roadshow Productions.

According to its CEO, Haris Antonopoulos: "We plan to produce two to three films annually that will have the potential for a theatrical career abroad. To that effect we intend to establish co-production deals with other private companies as well as with the relevant state institutions."

There has also been good news for Pandelis Voulgaris' long-gestating Brides, which has been backed by New York-based Barbara de Fina and Martin Scorsese's Cappa Productions alongside Michelle Ray-Gavras' GB Productions of France. The $3.4m film, executively produced by Scorsese and starring Damian Lewis, has now started shooting.

Theo Angelopoulos is also in a fortunate position as his status allows him to secure foreign funding. His $5.7m Trilogy No 1 - The Weeping Meadow, now in post-production, is backed by Italy's Classic Films and French Studio Canal.

These are, however, isolated cases. Although such developments are positive, the bottom line is that if the GFC does not secure a steady cashflow from the state, local film production is seriously threatened. The occasional investment of foreign capital in a local production or the brand name of a director who can secure financing abroad do not reflect the real state of the industry, and things are expected to be even tougher in 2004.

According to Bacoyannopoulos: "Long-term efforts to tap other potential funding sources, such as the 1.5% levy TV stations have to channel to film production, have not yielded results". TV channels should, according to the 1993 cinema law, invest 1.5% of their annual gross income in film production. The only company abiding by the law is public channel ERT. Private channels simply refuse to do so and the government inexplicably fails to bring them to justice.

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