Bulgaria and Hungary stall out, while Czechs and Poles gain traction

Eastern Europe is a study in contrasts.

In some countries government austerity programs are playing havoc with publicly funded film industries, while in others the industry is faring well considering the harsh economic climate of the past couple of years.

In Hungary, where a right-wing government seems intent on taking increasing control over the media, a major shake-up in the way soft money is channelled to filmmakers has brought chaos to an industry largely reliant on subsidies.

A national austerity budget in December slashed the funding of the Hungarian Motion Picture Public Foundation (MMKA) — the body which had overseen public film subsidies since the 1990s — and set up two new funds under the control of government ministries, one of which is mooted to be administed by Hungarian-born Hollywood producer Andrew Vajna.

MMKA, which had a budget of around $15 million but had been struggling to service interest payments on debts of $35 million, was left with just $4.8 million. Among its earliest decisions was to postpone the annual Hungarian Film Week this month, which is now scheduled to take place in April after backing from the Ministry of National Development and a national cultural fund was secured.

Eva Vezer, head of Filmunio, Hungary’s international film promotion body, says crisis in public film finance and policy could have an adverse impact on sales of local movies at Berlin’s European Film Market.

The film week — which usually runs just before the Berlinale opens — was a key opportunity for international festival programmers and critics to see the country’s latest features and documentaries.

To minimize the impact on Hungarian filmmakers, Vezer is making many titles that would have been screened at the film week available on DVD at the European Film Market.

Finding flexible ways to beat the funding crunch will continue throughout the year, Vezer says. Filmunio, which receives its coin from the MMKA, expects to have its budget cut and the organization is likely to have to reduce the number of international industry events it attends this year.

Bulgaria, too, is in the middle of an industry crisis provoked by changes to state film funding regulations made in early December that could slash the money available for local producers who, like their colleagues in Hungary, are heavily reliant on state support.

Part of a parcel of measures designed to keep the country from economic collapse, the decision to amend the Film Industry Act to give parliament discretion in granting funds for projects brought Bulgarian filmmakers out on the streets in protest.

The dismissal of deputy minister of culture Dimitar Dereliev and the resignation of Alexander Donev, head of the National Film Center — who had been criticized for his silence over the government’s actions and for approving a $220,000 grant to “Bye Bye Mama,” Bulgarian model Michelle Bonev’s helming debut — led to a meeting between protestors and Prime Minister Boyko Borissov at which a 12-point plan to restore and protect film and cultural funding was drawn up.

A key feature of the plan is to create a “functioning financial framework for Bulgarian culture” that relies not only on government funds but also on finding new sources of money.

It suggests a levy on audiovisual products and services — similar to that on cinema tickets, commercial TV and other items in many Europe countries. But it may prove tough to enact in hard economic hard times. Nevertheless, according to Irina Kanousheva, the new acting head of the National Film Center, there is a feeling of “moderate optimism” in the film community about the future.

“Finding new sources of financing is not a new idea, but for the first time the government really wants to do something,” she says.

“If it works, it would be a ray of sunshine for us in the film industry, since we’d see increased filmmaking budgets, and to the government, as filmmaking would no longer weigh heavily on the public purse.”

Ensuring that Bulgarian filmmakers get coin is another key aim, Kanousheva adds, although it seems that only one funding round is likely to take place per year instead of the usual two.

Industry campaigners hope the government will up the current film funding pledge from $6.6 million to $8.8 million.

The outlook in other parts of central Europe is brighter.

Ten years ago the Czech Republic was the leading European destination for cost-conscious international producers. But neighboring countries’ generous tax breaks undercut its film biz.

Years of campaigning to bring in production incentives have finally paid off.

A rolling, annual program that offers up to 20% rebates on local production costs was introduced in June.

By the end of the year $9.3 million had been paid out, with around $7.9 million going to international projects that returned to Prague’s studios.

Beneficiaries last year included the fourth installment of Paramount’s franchise, “Mission: Impossible — Ghost Protocol,” which produced with local partner Stillking Films and gained a rebate of around $2.2 million; TV series “Borgia” with $1.5 million; and wartime flying drama “Red Tails” with $1.1 million.

Czech productions also won rebates, including “Alois Nebel” the country’s first animated adaptation of a graphic novel, which earned $180,000 in rebate coin.

Although not a tax incentive, the system is winning plaudits for the speed with which it pays out once final production accounts are presented, and for its relative simplicity.

Ludmila Claussova, of the Czech Film Commission, which spearheaded lobbying to persuade reluctant Czech politicians to back the system, said the rebate was clearly attracting business back and local producers and service companies were very pleased.

“Obviously the competition was not sleeping during the years we were fighting for this system, and we’re going to have to work hard to catch up with countries like Hungary and Romania that greatly improved their services. We have to compete again and prove that we have the quality demanded,” Claussova said.

One sign that the new system — which this year has $15.7 million to distribute on a first-come, first-served basis — is proving a hit locally is the degree to which state tourist and investment bodies are now keen to work with the film commission, understanding the potential ripple effects of a revitalised film industry.

The robust health of Poland’s film industry is the region’s success story. The only European Union country to avoid a recession in the past two years, the Polish Film Institute handed out $36 million to the local industry in 2010. This year around $30 million in grants and subsidies is available.

“We can’t talk of any crisis in Poland and the Polish film industry in particular,” says Institute head Agnieszka Odorowicz. “The Institute celebrated its fifth anniversary last year and, since it was established, film production has grown three times. Last year nearly 60 features were completed.”

Among Polish success stories in 2010 were Bartek Konopka’s “Rabbit a la Berlin,” the country’s foreign language Oscar entry; a European Film Award for “Hanoi-Warsaw” by Katarzyna Klimkiewicz; and a special jury prize in Venice for “Essential Killing” by Jerzy Skolimowski.

More from the Berlin Daily: Central & Eastern European Cinema:
Fights and flights | Letters from Eastern Europe | Eastern European titles at Berlin

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