Finance ministers to scrutinise film fund

Date: 07/03/1996

AN AMBITIOUS plan to support European audiovisual culture with a special fund will be thrown to Mammon next week.

At the UK's insistence, finance ministers will get the first look at the 200-million-ecu guarantee fund proposed by the European Commission and aimed at attracting investment into Europe's film industry.

Culture ministers, who are expected to be more sympathetic to the idea, do not meet until June and the UK wants ministers who hold the budget strings of member states and the Union itself to scrutinise the plans when they meet on Monday (11 March).

Under the Commission's proposal, the cash will be managed by the European Investment Fund, an institution less than two years old which previously concentrated on providing loan guarantees for small companies and transport projects.

The fund would be set up to attract investment into the film-making business by providing guarantees on loans to producers from commercial backers. It is hoped that this would encourage them to make box-office hits.

“What we want to do is allow Ecofin to consider and comment on this issue,” said a UK official.

“The fund will be managed by the European Investment Bank through the EIF, which is the responsibility of finance ministers.”

Among diplomats at other delegations, the suspicion is growing that UK Chancellor of the Exchequer Kenneth Clarke has asked for the subject to be raised as a way of killing it. “This will be a chance for Clarke to say something about the fund and I'm sure it won't be complementary,” said a diplomat.

UK officials believe this is a harsh judgement, but acknowledge that finance ministers are likely to be more sceptical about the whole concept than their cultural counterparts.

Until now, Germany has been at the forefront of opposition to the idea. The Bonn government regards it as a covert move to reinstate cash which was cut from the Media II film-training programme in 1994.

The German government fought a tough battle to reduce the Media II budget from 400 to 310 million ecu, a difference of 90 million ecu.

Bonn is suspicious that the Commission is now suggesting that exactly the same amount, 90 million ecu, could be contributed to the guarantee fund.

Representatives of the German finance ministry are expected to argue, along with Clarke, that the concept is misconceived partly because it will not attract the required bank finance and also because the Commission has not specified where the extra 110 million ecu will come from to make up the full fund.

European film-makers are, however, keener on the idea.

They argue that this approach to helping the sector has the advantage of bringing in private finance and avoiding straightforward public sector funding for the industry.

The old approach, they say, has encouraged the making of non-commercial films.