Cinema levy set to cast the Twelve as villains

THE European Union is considering a new levy on cinema tickets to fund a recovery in Europe's ailing film industry. The proposal could trigger another transatlantic trade war, with Hollywood calling foul.

The European Commission is preparing a green paper containing suggestions on how to promote the industry. It includes a range of possibilities, but is said to be vague, raising more questions than it answers.

Next week the Commission will discuss subsidising the industry, possibly from a levy on cinema tickets, video rentals and broadcasting revenues, industry sources say.

Speaking to a conference in Brussels yesterday, Joao de Deus Pinheiro, the EU Com missioner for audio-visual policy, said that new cash could only be part of the strategy. 'The Commission wishes to open up the debate on a series of defined options around three fundamental pillars: financial stimulation; the regulatory framework; and the convergence of national systems.'

He warned that there is a limited time within which the industry can be saved, saying that 'the manouevring space at the European Union's disposal in order to define and implement an ambitious policy is subject to time constraints'.

The US film industry - which has 80 per cent of the European market - is concerned that it should not bear the burden of the new levies. 'Why should the profitable 80 per cent fund the unprofitable 20 per cent?' asked one US source. However, some parts of the industry are likely to accept the move.

The real concerns will come over what happens to the cash. The US will fight any effort to reserve the money for European producers as protectionist, arguing also that investment from the US can help the industry here. And it will oppose any measures that seek to lock out US programmes and films, made in Europe or elsewhere, promising a re-run of last year's rows in the Gatt trade talks over culture.

Brussels may also be heading for a clash with Britain over this issue. The EU's 1989 directive on broadcasting - 'television without frontiers' - specifies that 'wherever practicable, and with appropriate means' broadcasters should show a majority of European programmes. Last year, the Commission surveyed all 12 states to see who was keeping to the rules. It found that nearly all terrestrial channels were on the right side of the directive, or heading that way. But there was a marked difference when satellite channels were examined. This, many cable operators claim, is because they are thematic - hard to see, for instance, how a channel broadcasting classic Fifties westerns could use 50 per cent European programmes - or because they are just starting up.

Britain seems to have a different interpretation of the rules on the directive, officials in London and Brussels say. It interprets 'practicable' as allowing a wide leeway for some channels: the Commission would like a tougher line, and is considering taking legal action to prove its point.

Britain has already been taken to court on another issue relating to the Broadcasting Act, concerning the definition of which channels fall under British jurisdiction. London defines this differently from everyone else in Europe, and the Commission says that this may lead to some channels being regulated twice - or not all.

Britain argues that its definition of jurisdiction - which includes all operators who broadcast from Britain, or have a satellite link there - makes more sense than the alternative, which decides regulation on the basis of where the company's headquarters is located.

This may be the first shot in a long war, if the Commission also decides to cut up rough over quotas and about who regulates, and how.