Money talks at the Berlin Film Festival

Movies at the Berlin Film Festival have an international flavour, but it's for financial, not artistic reasons, says Kaleem Aftab

The Berlin International Film Festival opened last night with The International, directed by the German Tom Tykwer, starring Clive Owen, a Briton, opposite the Australian Naomi Watts and a Danish villain, Ulrich Thomsen. It's financed with American and German money and takes place in Berlin, Milan, New York and Istanbul. It's an apt title for the opening film at a festival that may go down in history as signalling the death knell of domestic cinema.

In this time of austerity, money is talking more than ever at the pictures and increasingly it's the local stories that often highlight a country's unique cultural heritage that are being sacrificed. Even before the global credit crunch, many film financiers had decided that only movies with broad international appeal were worth investing in. By and large, sales companies are only interested in representing work that can be sold in multiple territories as they argue that domestic tales do not sell abroad.

To make money, a film needs to do well at the box office or sell television rights in several countries; consequently, film producers are encouraging directors to include sops to valuable international markets. In recent years, the rise of globalisation means that more and more markets are being included on the list, especially South-east Asia and the Middle East.

The bait to encourage international sales comes in many guises. One popular method is to have actors from a number of countries appearing in them. Or directors, as with The International, are encouraged to shoot in locations across the world. Indeed, both British directors competing for The Golden Bear at the Berlinale have shot outside of the UK.

Sally Potter's new film, Rage, is a contemporary tale set around New York's fashion industry and Stephen Frears' Chéri, starring the American Michelle Pfeiffer and Brits Kathy Bates and Rupert Friend, is set in the world of Paris courtesans at the start of the 20th century.

Indeed, the one film in the competition shot in the UK, London River, directed by Algerian Rachid Bouchareb, is about a French Muslim man who meets a British Channel Islander in the aftermath of the 7 July 2005 Tube bombings.

Swedish director Lukas Moodysson has made his first English-language film, Mammoth, with Swedish, German and Danish money. It has Mexican Gael Garcia Bernal playing a New Yorker married to Michelle Williams, who spends a huge chunk of the movie in Thailand.

It seems that the dearth of funding in the UK for feature films means that British cinema has been affected by the need to appeal across borders more than most. A major source of funding for British film now comes from Europe, and to access most of these funds there needs to be a co-production element, which means that purely British-based stories featuring only British actors will not qualify.

The result of the need for international financing to help make a "British" film can be seen at the Baftas on Sunday with the nominations for Outstanding British Film of the year. The five nominated films are In Bruges (set in Belgium) Slumdog Millionaire (India), Mamma Mia! (Greece), Man on Wire (about a French funambulist doing amazing thinga in New York), with Hunger set in the Maze Prison being the closest to mainland Britain, and the only one of the five that has anything to say about British life.

It's a similar story with the other UK films showing at the Berlinale. An Education had its world premiere at Sundance and in the director's chair is Dane Lone Scherfig. Based on a Nick Hornby script, the action, set in 1961 London, stars the young English actress Carey Mulligan as a teenager dreaming of life in Paris when her world is turned upside down by the arrival of an older man, played by American Peter Sarsgaard – yes, the film has American money attached to it. Another UK film with American cash is An Englishman in New York, which sees John Hurt once again playing Quentin Crisp – the first time was in Jack Gold's 1975 television production of The Naked Civil Servant.

This year, the British films being screened highlight the problem that affects most films at Berlin, where there are hardly any unique voices telling us new stories about national identities. Normally at film festivals there is a sense of excitement caused by news that the national cinema of a country has started to shine – recently it was Romania, before that Germany – but at this festival it's not national cinema that is being showcased, but a bland hotchpotch of international financial compromises.

The Berlin Film Festival runs until 15 February (www.berlinale.de)