MMKA ran up debts of $35 million last year

Hungary’s public film funding body is to be replaced by a new org following months of controversy and political manoeuvring.

The Hungarian Motion Picture Public Foundation (MMKA) — founded by a raft of industry players in the 1990s — hit the headlines last year after an audit found it had run up debts of $35 million.

The body, which was one of two foundations that set up Hungary’s 20% production tax rebate system in 2004, got into financial trouble after pledging support for too many movies, critics say.

Austerity measures introduced by Hungary’s right-of-center prime minister Viktor Orban last year slashed the org’s budget by 66% to around $5 million.

At the same time a shake-up in the way public money is distributed for film was announced and Hungarian-born “Rambo” producer Andrew Vajna was appointed as a government film commissioner charged with creating a new system.

The government’s decision to close the MMKA was revealed in a meeting with representatives of its 26 founders and Ministry of Culture and Ministry of Justice officials on Wednesday.

“The MMKA is to close but no date has been set,” Csaba Bereczki, MMKA director of international relations told Daily Variety.

Vajna is due to give a presentation to industryites in Budapest on Monday at which details of MMKA’s replacement are likely to be announced.

Vajna says he will consider the merits of all outstanding funding commitments when making decisions under the new structure, which will not need EU approval as the qualifying criteria will remain the same.

The tax rebate will not be hit by the changes, Vajna said. “Productions shooting in Hungary will not be affected, they will continue to enjoy the same advantages as before.”

One industry source said the closure of the film foundation was not unexpected as it was part of government reforms of all cultural and educational foundations.

Vajna is likely to recommend a transparent structure of film funding with different bodies responsible for supporting commercial and art-house projects, the source said.

“I am sure that the tax credit will be retained and funding will become clearer; Vajna has studied the existing system and does not like the cross-funding that goes on and the opaque structure of personal contacts,” he said. “He wants to make it neat, clear and well structured.”

Vajna is also understood to be negotiating with Hungarian banks to ensure that producers promised funding under the old system are paid, the source added.

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