France moves to block EU film subsidies to Eastern Europe  

Law makers in Brussels are to throw a lifeline to the ailing film industry in Eastern Europe with a controversial shake-up in the way the European Union subsidises cinema.

After the fall of the Berlin Wall, national cinema in countries such as Poland and Hungary collapsed, with audiences disappearing and domestic production grinding to a halt.

In recent years, audiences have increased but the weakened domestic industry could not stand up to the onslaught from Hollywood and the arrival of multiplexes. The result in Poland, the largest of the new European Union entrants, is that only three cinemas show Polish films. With eight former communist-bloc countries to join the EU in May, proposals have been floated aimed at spurring rapid film-industry growth. The plans would force producers in wealthier states to spread subsidies through the 25-nation bloc by co-productions. Under today's system, producers must work within national borders to qualify for funding.

Public funding for the film industry in the EU is nearly £1bn, figures from the European Audiovisual Observatory show. The new rules would mean half the money would have to be spent outside present borders, making films in the new EU member states. The legendary Polish director Andresz Wajda, whose work since the 1950s saw him fêted with the Palme D'or at Cannes and an Oscar for lifetime achievement, said: "Alas, the fall of the Berlin Wall meant our cinema lost the interest of others. [Before,] Censorship wasn't too severe. Polish film attracted the West because everyone wanted to know what it was like to live behind the Iron Curtain."

Andrew Horton, editor of the European film journal Kinoeye, says home-grown films can be competitive with US imports if they can get the funding. "Time and again, studies have shown people prefer the local option if it's available," he said.

Ironically, France, the country usually seen as the guardian of European cinema, stands in the way of the plans. French film industry chiefs are trying to block the changes in talks with Brussels regulators. They say curbs on domestic funding will only strengthen the dominant spending power of Hollywood and lead to a further "Americanisation" of European culture.

More than half of the films seen on European screens every year come from America. Eurostat estimates that Hollywood productions accounted for nearly 75 per cent of films shown in the EU in 2002. In America, US productions accounted for 95 per cent of all new films shown since 1993. Europeans go to the cinema less often than Americans, with an average of 2.1 visits per year compared with 5.5 in the US. The average in new EU entrants is less than one visit per year.

Defenders of the funding proposals say only public funding for cross-border productions that can attract broader audiences offers any future for European cinema.

A teacher at Wajda's film academy in the Polish capital, Warsaw, said: "Economic censorship is harder to get around than political censorship. You could get around the political kind."