After cutting public funding of Icelandic cinema by 35% in the last two years, due to the financial crisis, the Icelandic Ministries of Culture and Finance have now signed a new agreement with the industry outlining a 62% increase of state support from now till 2015, when it will amount to $5.7 million (ISK 700 million).

”$5.7 million was what we were supposed to have for 2010, so with the same money after a five-year delay – and a 50% devaluation after the crash – we will still run on tight budgets,” said managing director Laufey Guðjónsdóttir, of the Icelandic Film Centre. ”However, the Icelandic economy is still difficult, so it was probably the best result we could hope for. And Icelandic filmmakers are used to working with low budgets, and they have before delivered good films despite limited resources.”

”What’s important about the agreement is that we now have a framework – we know approximately what we have on the table in the next couple of years. And for the first time the government has allocated money for the digital preservation of older Icelandic films,” Guðjónsdóttir concluded.

After nine Icelandic productions in 2010 and eight in 2011, Gudjónsdóttir expected three new films to be launched this year, including Baltasar Kormákur’s The Deep (which was shot in 2010) [pictured], cinematographer-turned-director Óskar Axelsson’s feature debut, Black’s Game (from 2011), and Börkur Gunnarsson’s Rock Bottom.

Signed with Icelandic Producers Association, the Association of Icelandic Film Directors and the Icelandic Filmmakers Association, the contract introduces a new support system based on box-office earnings. If Iceland’s economy improves faster than expected, government grants may be renegotiated, it states.