3 Financial support for the audiovisual
industry, 2007-13
| (25845)
11585/04
COM(04)470
+ ADD 1
| Draft Decision on the implementation of a programme of support for the European audiovisual sector (MEDIA 2007)
|
| Legal base | Articles 150(4) and 157(3) EC; co-decision; QMV
|
| Document originated | 14 July 2004
|
| Deposited in Parliament | 22 July 2004
|
| Department | Culture, Media and Sport
|
| Basis of consideration | EM of 7 October 2004
|
| Previous Committee Report | None
|
| To be discussed in Council | No date set
|
| Committee's assessment | Politically important
|
| Committee's decision | Not cleared; further information requested
|
Background
3.1 Community support for the audiovisual sector is mainly provided
by the MEDIA Plus and MEDIA Training programmes. Both cover from
2001 to the end of 2006. They have a combined budget of about
€500 million.
3.2 The MEDIA Plus programme provides support for
the pre-production, development and distribution of films, television
and radio programmes, videos and other audiovisual products. The
MEDIA training programme supports projects to improve the competitiveness
of the European audiovisual sector through professional training
in, for example, digitisation and management. Both programmes
are intended to supplement Member States' support for their national
audiovisual industries.
3.3 Article 150 of the Treaty establishing the European
Community (the EC Treaty) provides for the Community to take action
to supplement and support vocational training by Member States
and to foster cooperation on vocational training with third countries.
Article 157 requires the Community and Member States to ensure
that the conditions exist for the competitiveness of the Community's
industries and of small and medium-sized enterprises (SMEs), in
particular. It authorises the Council to adopt measures to support
action by Member States to achieve this aim.
The document
3.4 The document comprises an explanatory memorandum
by the Commission and a draft Decision establishing a MEDIA 2007
programme, with a total budget of €1,055
million for the period 2007-13. The annex (ADD 1) contains an
extended impact assessment of the proposal.
3.5 The Commission says that the European audiovisual
sector has an important cultural impact but cannot realise its
potential without increasing its competitiveness. Works produced
by the European audiovisual sector account for about 40% to 45%
of the European market for television fiction, about 30% of the
market for films and 20% of the video and DVD market; most of
the European share is held by audiovisual works sold in their
national markets. Five member States (France, Germany, Italy,
Spain and the United Kingdom) account for about two-thirds of
the total production of European films. But the USA accounts for
over two-thirds of the European market for films. The European
audiovisual sector is mainly made up of SMEs. For example, 91%
of the United Kingdom's film and video businesses employed nine
people or fewer in 2000. SMEs have very limited access to financing
from the commercial banks and other private sector financial institutions.
3.6 In the Commission's view, changes to Community
support for the audiovisual sector are necessary because of:
- the enlargement of the European
Union;
- the advent and rapid development of new audiovisual
services and products, including digital technologies; and
- under-investment in the sector and, in particular,
lack of external financing for SMEs.
3.7 The Commission proposes that the MEDIA 2007 programme
should bring together the activities currently financed through
the MEDIA Plus and MEDIA training programmes and the "i2i"
programme (which aims to help audiovisual companies obtain financing
from the private sector by supporting some of the charges, such
as loan guarantees). Financial support for the production of films
would continue to come from national and regional authorities.
3.8 The new programme would have three general objectives:
- to preserve and enhance European
cultural diversity and its cinematographic and audiovisual heritage,
guarantee its accessibility to European citizens and promote intercultural
dialogue;
- to increase the circulation of European audiovisual
works inside and outside the European Union; and
- to strengthen the competitiveness of the European
audiovisual sector.
3.9 The programme would support the pre-production,
development, distribution and promotion of European works through
assistance and encouragement of, for example, vocational training;
investment in cross-border projects; cooperation between broadcasters,
producers and distributors; and incentives for exports.
3.10 Participation in the new programme would be
open not only to Member States but also to other countries in
the European Economic Area, accession and candidate countries
and countries with cooperation agreements with the European Union.
Grants would generally not exceed 50% of the final cost of the
project.
3.11 The Commission intends to simplify the present
grant and administration procedures.
3.12 The draft Decision requires the Commission to
produce an interim evaluation of the programme in 2010, a Communication
on the continuation of the programme in 2011 and a final evaluation
report in 2015.
The Government's view
3.13 The Minister for the Arts at the Department
for Culture, Media and Sport (Estelle Morris) tells us that:
"The Government broadly agrees with the policy
goals of the proposal — improving the competitiveness of
the audiovisual sector, increasing the international circulation
of European audiovisual products and promoting cultural diversity.
We will be carefully scrutinising the evaluations of the previous
MEDIA programmes to ensure that the MEDIA 2007 programme is a
proportionate and effective means of achieving these aims, and
seek to focus the programme on areas of activity which make the
most effective contribution to the EU's audiovisual policy objectives.
"The UK feels that the monitoring and evaluation
of the programme can be improved through the inclusion of SMART
(Specific, Measurable, Achievable, Realistic and Timed) objectives
which will allow a more thorough assessment of the programme's
contribution to the overall goals of EU audiovisual policy. We
will propose amendments to the text that would introduce SMART
objectives.
"It is also important that the MEDIA programme
is complementary to both national aid and other EU aid. The proposals
do not currently incorporate an adequate mechanism for securing
this, and the UK would like to see such a mechanism included in
the agreed MEDIA 2007 programme."
3.14 The Minister welcomes the Commission's intention
to simplify the financial and administrative procedures.
3.15 She notes that the proposed budget (€1,055
million) would be much bigger than the combined budgets of the
present programmes. She also notes that the budget for MEDIA 2007
cannot be settled until the negotiations on the Financial Perspective
for 2007-13 have been completed. The governments of the UK and
five other Member States consider that the Commission's proposals
for the total budget for the next Financial Perspective are excessive.
The outcome of the negotiations on that budget may have an impact
on the size and contents of the MEDIA 2007 programme.
3.16 Finally, the Minister tells us that the Government
has just completed consultations on its negotiating position on
the new programme and will shortly be publishing a summary of
the responses.
Conclusion
3.17 We note that the document and its annex contain
much information about the activities that have taken place under
the existing MEDIA programmes. But they provide only the scantiest
quantified information on the effectiveness of the expenditure
on improving the competitiveness of the European audiovisual sector.
We doubt, therefore, that the Commission has yet provided sufficient
justification for its proposal for a substantial increase in the
budget for the support of the sector. So we welcome the Government's
intention to seek amendments to the draft Decision to incorporate
more meaningful and measurable objectives. We ask the Minister,
in addition, to press the Commission to provide further information
to enable a well-founded view to be taken on the likely effectiveness
of the proposed increase in expenditure, and to tell us the response
she receives from the Commission.
3.18 The negotiations on the draft Decision have
only just begun. We ask the Minister to keep us informed of the
progress of the negotiations.
3.19 We should also be grateful for a supplementary
Explanatory Memorandum on the results of the Government's consultations
about its negotiating position.
3.20 Pending receipt of this further information,
we shall keep the document under scrutiny.
| 
