PARIS, Nov 14 (Reuters) - France claimed victory on Wednesday as Europe's executive arm agreed to preserve state subsidies for the film sector, maintaining exemptions from rules that restrict government aid within the trading bloc.
This 'cultural exception' provoked a row between European states earlier this year when France demanded that film and entertainment be taken off the table in talks on a trade deal between the United States and the European Union.
Talks moved ahead after European partners accepted France's request to have movies and online entertainment removed from the talks. Public subsidies for the movie sector were being examined by the European Commission as a separate issue linked to EU limits on state aid.
French Culture Minister Aurelie Filippetti said she had lobbied the Commission for over a year to ensure that the exemptions to state aid rules for cultural products, which had lapsed, would be renewed.
The Commission said on Thursday it had revised rules on state aid to allow states to fund up to half of a film's budget. Member states will also be able to insist that 50 to 80 percent of subsidised films' budgets must be spent within the country.
'This is a great outcome,' Filippetti told journalists. 'A reversal of these principles could have had dramatic effects on our entire film sector... The risk was that nobody would be able to do anything at all to support cinema in their country.'
France, which invests heavily to promote French-language teaching and culture around the world, is firmly attached to the idea that cultural products should be exempt from anti-subsidy rules and any free trade agreements.
Thanks partly to an elaborate system of public subsidies, France invested more than 1.3 billion euros ($1.75 billion) to produce 279 films in 2012, more than most other nations.
The EU-U.S. talks, which were launched in July and aim to generate annual benefits of 119 billion euros, restarted this week after a second round due to be held in October was postponed due to the U.S. government shutdown.
'This is the deal we had been looking for, allowing an exception to the liberalisation of the internal market,' said Filippetti. 'It will allow the full diversity of our cultural production to be preserved.' ($1 = 0.7430 euros)
(Reporting by Nicholas Vinocur; Editing by Ruth Pitchford) Keywords: EUROPE CULTURE/FRANCE
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