Javier Martin Dominguez has quit as artistic director of Spain’s Seville European Film Festival, raising a question about the future of an event he had built into a valuable European industry hub.

Martin Dominguez’s resignation comes after the Seville Town Hall slashed SEFF’s budget from €1.7 million ($2.2 million) in 2010 to $1.4 million last year. Further 30% plus cuts are anticipated for 2012.

Over a four-year tenure, Martin Dominguez built Seville into a vibrant meeting point for producers, distributors and institutions — such as the European Film Academy and Eurimages, both of which received showcases — as well as a launch-pad for European films in Spain and Andalusian producers in Europe.

The fest also hosted the nominations announcement for the European Film Awards.

But last year Seville had to halve its guest and press invitations, Martin Dominguez told Variety. “I’m not interested in directing a low-profile, limited event,” he said.

Martin Dominguez, who was the correspondent in New York and Tokyo for Spanish pubcaster RTVE, and later served as its secretary general, used his contacts to bring many industry figures to Seville.

The key question is whether Seville will now have the critical mass, or a director with Martin Dominguez’s connections, to continue as a meaningful international event.

As regional governments slash expenditure, many other Spanish fests now fear for their 2012 budgets. A rare exception, the San Sebastian Festival increased its budget by $500,000 to $9.2 million in 2011, hiking sponsorship deals while institutional support held.