Following the drastic 30% government cuts to the Magyar film sector, the 26th annual Hungarian Film Week, which wrapped Feb. 8 after four days of screenings, revealed that Hungarian cinema, as well as this festival, has become leaner but considerably meaner.

This year’s festival premiered a smaller roster of films – 14 features and 39 documentaries – than in the recent past. But many of the features were highly lauded by critics and professionals, and insiders are suggesting that Hungary’s scarce cinematic resources are now being harnessed to produce fewer and better films.

“The quality of the films were a lot higher than they were last year,” said Gabe von Dettre, a Hungarian-born director who splits his time between New York and Europe. “In terms of the ability of filmmakers here to create strong and creative structures, they are really doing well.”

Peter Gothar’s “A Reszleg” (The Section), a love story set in the Carpathian mountains, was praised by visiting critics, who awarded it the Gene Moskowitz Prize for best film.

The jury recognized another festival favorite, “Esti Kornel” (The Wondrous Voyage of Kornel Esti), an adaptation of the famous Hungarian novel, by granting best cinematographer award to its lenser Francisco Gozon.

The jury also gave a nod to two critical near misses. Both Ildiko Enyedi’s “The Magic Hunter” and Peter Basco’s “Another Witness” had failed to live up to many expectations. But “Hunter” helmer Enyedi shared a “special” jury award with director Gyorgy Szomjas (“Kisses and Scratches”). “Witness” star Ferenc Kallai took home the best actor award. “Another Witness” producers Focusfilm shared the best independent production award with the makers of “Mao: The Real Man.” “Another Witness” also earned the People’s Choice award for packing the most commercial appeal.

Despite critical praise, not all industry insiders were impressed with the festival’s roster. One L.A.-based distributor told Variety that not one of the 14 features would “attract an audience in a U.S. theater.” Director Dettre admitted that the international appeal of the festival’s best entries would probably be limited to European arthouses.

Which is not a bad thing for the auteurs. “Hungarian films are not making a compromise for profit and meaningless successes,” explained Dettre. “It’s really good to see that.”

But if Hungary’s socialist-liberal government continues to cut state subsidies to cinema, insiders admit that an unwillingness to compromise may become the industry’s curse.