Brussels The European Commission (EC) is still some way from gaining acceptance for the idea of a guarantee fund for the European film industry. Meeting in Luxembourg, EU culture ministers heard a progress report and held an exchange of views on the proposal.

Unanimity will be required before a decision can be reached, but three member states have serious reservations: Germany, the UK and The Netherlands.

The EC considers that the fund would have a leverage effect in encouraging investments in the audio-visual sector. With a capital of ECU200 (US$252) million, of which ECU90 (US$113) million would come from the EU budget, the idea is to generate up to ECU1 (US$1.26) billion in loans for European producers. The fund would work alongside MEDIA 2.

The three countries doubt that the fund would become self-financing in the mid-term, and consider it inadequate for generating private capital, fearing that it would only benefit large budget productions.

The majority of member states are, in principle, in favour of a guarantee fund, but several have doubts nonetheless. The Commission has therefore promised an interim business plan and a provisional list of financial institutions prepared to participate.

The proposal was drawn up at the suggestion of the European Film Companies Alliance (EFCA), representing Bertelsmann, Chargeurs, CiBy 2000, PolyGram, Rank, RCS and Sogepaq. If the idea of a guarantee fund works, EFCA says, in 10 years there could be two or three European companies producing films and TV programmes for the international market, competing with US studios and making Europe less dependent on US imports.

According to EFCA, the fund, administered by both the European Investment Fund and the private sector, should receive a proportion of the net profits of films it supports, so as to make it self-financing.

The fund should be open to all European production companies.

François Head

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