On the eve of this year'sLocarno International Film Festival, which will open on Wednesday (August 2)with Michael Mann's Miami Vice,the festival's president Marco Solari has spoken out about the financialchallenges facing Locarno for this year and for the future.

In an interview with theSwiss daily newspaper Der Bund atthe weekend, Solari explained that the budgetfor the 2006 edition was 1.5% lower than the previous year's because the Canton ofTessin allocated $80,093 (CHF 100,000) less than last year and Swatch did notcontinue its sponsorship of the event. "We have been able to compensatefor the loss of this money only partly with new sponsors such as Swiss Life andNestle Schweiz," Solari explained.

He had hoped that therewould be a reduction in expenditure through the streamlining of the festival'sprogramme from 260 to 170 films. However, "this was unfortunatelynotthe case. One reason is that this year more film-makers have accepted our invitationto come to the festival than before."

Solari admitted that thefestival was burdened with additional costs through the need to accommodatemore festival guests in the neighbouring town of Ascona in the light of thehotel crisis in Locarno.

This year's festival will bethe first year that organisers will have to make do without the legendary GrandHotel for accommodation (83 rooms) and as a venue for receptions and parties.Last year had seen the Muralto, Zurigo, Beau Rivage Verbano and Reber hotelsbeing closed for conversion into luxury apartments.

"For the first time Ihave real budgetary worries," Solari said. "The structural costs aregetting out of hand. The festival, which finances itselfonly to 20%, isfaced with a fundamental alternative: redimensioning or finding new financialsources."

He argued that restructuringwas not an option: "We are condemned to growth. The other festivals arealso developing further. Cannes, Venice and Berlin are stronger then ever, andnow the festival in Rome is appearing on the scene. Locarno could keep paceuntil now because we work extremely economically. I am now feeling gloomy forthe first time: it can't continue like this."

According to Solari, thefestival would need an additional $567,651-$810,931 (CHF 700,000- 1m) for nextyear's 60th jubilee edition. "Plain and simple, it is about the future ofthe festival. If we cannot raise the budget, we will have to restructure: arestructured festival can no longer keep pace internationally."

While the festival had made"practically no cutbacks" for this year, Solari explained that he was"on my last legs for the 60th edition in 2007. I cannot work without aminimum of reserves. However that means cutbacks, Therefore, I pose thequestion to everyone, to the politicians, business and culture: Do you wantthis festival' It is not a question that they should give us a present. Theprerequisites for a good festival which can hold its own internationally arethere. But this festival must be financed."

This year's festival has anoverall budget of $7.9m (CHF 9.8m), 50% coming from the public purse (Canton ofTessin CHF 2.5m, Federal Office for Culture CHF 1.2m, Swiss Agency forDevelopment and Cooperation max. CHF 500,000), 30% from sponsoring andpartnerships, and 20% from ticket sales, merchandising and other income.