VENICE — European Union pols are poised to clash over proposed new film funding legislation, now in final stages, that could cut coin for Euro co-productions with Hollywood and other countries, and make cross-border co-prods within Europe more complicated to mount.

Doris Pack, chair of the European Parliament’s Culture Committee, sounded an alarm at the Venice Film Festival about the cinema communications law, being drafted by the European Commission, the EU’s executive body.

“We are waiting for the law but, from what I hear, they are moving in the wrong direction. They are trying to diminish co-productions across the board, and I think this is wrong,” she said.

Pack confirmed reports about changes that would cut aid to foreign productions filming within Europe and also regs that would force producers (both inside and outside Europe) to spend 100% of the aid they get within the country offering the incentives, rather than the current 80%. Producers fear this would nix co-productions that require multi-territory flexibility.

“We are living in a globalized world,” Pack reiterated. “We should not stick to our little EU. It’s important; but it is not everything. We must continue on the path that led to the creation of Media Mundus, but from what I hear that may also be in danger.”

Media Mundus is the EU program, launched in 2011, that supports co-productions and other initiatives aimed at building links between the Euro film industry and other territories.

The Commission believes the changes will make the film industry more compliant with competition criteria that apply to all EU industries. Bureaucrats in Brussels, for example, object to the so-called subsidy race among some countries, such as Germany and France, which use state aid to attract investments from large-scale, mainly U.S., film companies.

Pack said she expected the cinema communications law to go before Parliament in early 2013.