Two of Europe’s biggest film companies, France’s EuropaCorp and Italy’s RAI Cinema, have inked a three-year production-distribution pact.

Running 2003 to 2005, the deal commits RAI Cinema to co-produce at least two films from EuropaCorp, which will put up equity for at least one Italian film a year from RAI Cinema.

01 Distribution, RAI Cinema’s distrib arm in Italy, will handle all the films acquired from EuropaCorp beginning with Cannes opener “Fanfan La Tulipe” as well as “Bon Voyage” and “Michel Vaillant.”

According to Carlo Macchitella, RAI Cinema exec veep and 01 Distribution prexy, the first EuropaCorp pic that RAI Cinema may co-produce is the $43 million “Danny the Dog,” starring Morgan Freeman, Jet Li and Bob Hoskins.

Pic has just wrapped principal photography.

“We are in discussions. A decision could be taken in the next month,” Macchitella tells Variety.

The EuropaCorp deal is the second high-profile accord sealed by RAI Cinema in months. Last November, Lakeshore Ent. pacted with RAI Cinema to co-produce and distribute Italian-and English-lingo features.

“Movies cost so much these days that it is impossible to make them without help,” Machitella said.

“To produce, you need to initiate good projects, be passionate about production, have an excellent home base and abroad, on a country-by-country basis, listen to partners and friends,” says EuropaCorp CEO Pierre-Ange Le Pogam, who runs EuropaCorp with Luc Besson.

“We want to pick up some good quality European projects,” he adds.

RAI Cinema also provides EuropaCorp with distribution and key TV promotion in one of Europe’s largest markets.

The agreement additionally gives RAI Cinema the opportunity to acquire TV rights for several more films produced by EuropaCorp.