The German Film Export Union's efforts to promote German cinema abroad have been dealt a blow by the decision of federal culture minister Michael Naumann to cut its financial support by $104,500 (DM215,000) this year.

The Munich-based promotion agency said in press release that the reduction in the culture ministry's contribution to its $2m (DM4m) budget could result in the cancellation of one its annual festivals of German cinema this year. The Export Union organises festivals in Madrid, Paris, London and Rome along with a film schools showcase "Next Generation" and the German reception in Cannes.

However Germany's six main film funds - Filmboard Berlin-Brandenburg, FilmFernsehFonds Bayern, FilmFoerderung Hamburg, Filmstiftung NRW, MFG Baden-Wuerttemberg and Mitteldeutsche Medienfoerderung - unanimously agreed to provide the Export Union with $223,700 (DM460,000), the same amount of last year, towards financing events.

The ministry's decision was unexpected as Naumann has recently called for the agency to extend its brief to include TV and documentary productions. "More funds and not less are required for the realisation of this sensible demand," Export Union said in its statement.

The budget cut also seems misplaced as the Export Union festivals are seen by German exporters as an ideal opportunity to showcase their product to TV and theatrical buyers as well as reach a public audience. Last year's Paris event resulted in sales to French distributors, and the London festival sowed the seeds for the sale of six German films - including Trains 'N Roses and Am I Beautiful' - to BBC digital channel BBC Knowledge. The BBC deal was brokered by the Export Union's UK representative Iris Kehr (Screendaily March 24).