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Italy’s film community is up in arms over possible cutbacks in film funding coin at pubcaster RAI, just as the country’s new government is being installed to implement a draconian austerity plan.

RAI general manager Lorenza Lei has warned of budget cuts at RAI Cinema, prompting protests from Italo motion picture org. Anica, which fears this would cause a “collapse of our film industry system” at a time when local movies are thriving.

On Wednesday economist Mario Monti replaced Silvio Berlusconi as prime minister, with a mandate to act radically and rapidly to shore up Italy’s spiralling debt.

RAI, which has more than 11,000 staffers and debts of some €200 million ($270 million), is trying to push through its own austerity measures, which include a reported 1,000 pink slips, extensive pay cuts and across-the-board budget slashes.

RAI Cinema pumps more than $60 million annually into the local film industry.

Luckily, however, state film funding and generous tax incentives will not be affected by Monti’s austerity measures.

Italy’s FUS fund for the arts and film production tax incentives are drawn from a tax on automobile gas, which is considered to be safeguarded.

Monti on Wednesday appointed Lorenzo Ornaghi as Culture Czar, replacing Giancarlo Galan who had been a staunch supporter of the film industry.

Among Ornaghi’s top priorities is appointing a Venice Biennale topper who, in turn, will decide whether Marco Mueller will stay on as director of the Venice Film Festival.