EU urges $250 mil pic fund

BRUSSELS — Representatives of the European Union film industry met with senior civil servants Friday to urge them to set up a $250 million “guarantee fund” to support the industry in Europe.

Philip Kern, spokesman for the European Film Cos.’ Alliance (EFCA), which includes Polygram, Chargeurs and Bertelsmann, said, “According to the latest report by the EU Audiovisual Observatory, the EU trade deficit (cinema, television, radio) with the U.S. stands at around 5 billion ECU ($5.7 billion), 14.5% more than in 1994 and 50% more than in 1991. The setting up of the EU Audiovisual Guarantee Fund constitutes a major first step towards a revitalized EU program industry.”

The meeting, which took place at the initiative of the Dutch Presidency of the EU, was attended by representatives of major European film companies, including Malcolm Ritchie of Polygram and Mannfred Kuhn of CLT-UFA.

No problem for studios

U.S. studios have made it clear that they have no problem with a guarantee fund available to everyone, but they are opposed to European plans for incentives and subsidies from which U.S. companies operating in Europe would be excluded.

According to the commission, the fund could help raise up to $1 billion to help the European industry compete with Hollywood, financing an estimated 415 movies, 215 TV productions and 60 catalog operations over the next 10 years.

The fund would not give direct assistance to companies but would work through commercially motivated banks and insurance companies by mitigating their film-financing risks.

Loan underwriting

According to the plans put forward by the commission, the fund will be used to underwrite bank loans for European film and TV productions. A bank or a financial institution providing a production loan to a European filmmaker could apply to the fund to cover up to 50% of its risk.

The fund would be managed by the European Investment Fund, whose shareholders include the European Community, the European Investment Bank and national banks.

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