At the heart of international co-productions lies an essential paradox for Europe. The various national incentive schemes and subsidies upon which they depend are designed to keep filmmaking crews and talents fully employed in their local countries. And yet, co-production treaties are meant to encourage cross-border collaborations.

This contradiction may help explain the tortured arrangements producers often find themselves entering into in order to satisfy the various national requirements to unlock their soft money enticements.

Speaking on the international co-production panel at the Screen International European Film Summit, A-Film's San Fu Maltha recalled the absurdity of having to spend 125% of his budget to meet the spending requirements set up by the different countries funds, tax breaks and co-production treaties.

The result of such financial machinations and artistic compromises, said Maltha is that, 'you still see obvious Euro-pudding elements in the films, which doesn't make them any better.'

According to Maltha, everyone in Holland can see that The Girl With The Pearl Earring wasn't shot in Delft but Luxembourg, though he admits few outside the country seemed to notice. The goal should be to find natural co-productions, but 'not everyone can copy the Peter Aalbaek Jensen way, ' he said, referring to Zentropa's managing director and his low-budget filmmaking methods. 'You just don't make enough money doing it that way.'

LA-based Stuart Pollok of Studio Hamburg also seeks out international projects and sees few natural co-productions. 'If it isn't natural, it is always better to go for the commercial projects.'

Also based in the US, John Sloss of Cinetic Media has also been pursuing soft money subsidy projects, but realised that without presales this was a difficult proposition. But not impossible: having seen Brad Anderson's 2001 American indie film, Session 9, gross more in Spain than in the US, Sloss turned to Spain's Filmax to fully finance his Berlin-entry The Machinist. Not only that, but the US-set film was shot entirely in Spain.

Without its own system of national subsidies to stimulate cinema, 'The US is in the stone age when it comes to supporting filmmakers,' noted Sloss. On the other hand, the very existence of subsidies and tax-driven incentive schemes on this side of the Atlantic also means that Europe lacks the same entrepreneurial spirit that he sees at home. In the US, filmmakers simply have no other choice.