Representatives of the Irish Film Board and the Hungarian Motion Picture Public Foundation will sign a co-production agreement in Berlin on Sunday, February 8, which is designed to foster co-productions between the two territories.

The deal includes a reciprocal feature whereby producers from the two territories will in effect take turns acting as majority co-producers, Toth said.

Hungarian Film Commissioner Erszebet Toth announced the agreement February 2 at Hungarian Film Week in Budapest.

Toth emphasized that the reciprocity is in terms of proportion of the budget, not absolute dollar amounts.

For example, a co-production in which 80% of the budget comes from the Irish side would be answered by a co-production in which 80% of the budget comes from the Hungarian side.

The agreement further stipulates that not more than 30% of the budget of such co-productions can come from third parties.

Hungary has also signed a bilateral agreement with Germany which the two countries' governments hope will serve as a foundation for the future. 'It creates an opportunity for regional funds in Hungary and Germany to create agreements,' Toth said.

Toth said that concrete deals between Hungarian and German funds are unlikely to be seen immediately as the framework agreement itself took eight years to negotiate. Negotiations are also under way to create a similar arrangement between Hungary and France.

Hungary's appeal as a location and production partner soared with the implementation of a 20% tax relief system in 2004 but faltered last year due to Hollywood strikes and rewriting of the territory's film law to include a cultural test, as required by the European Commission.

The Hungarian tax relief system contributed $18.8m in support to film productions in 2008, down from $29m in 2007.