Global Trade Alert

On 17 December 2012, Germany notified the EU about the prolongation of the State aid scheme for cinematographic and audiovisual production, called'Mitteldeutsche Medienförderung'. The scheme will be extended until 31 December 2015.
 
The previous scheme was notified on 6 October 2009 and expired on 31 December 2012, while the initial scheme was communicated in July 2001 (N440/2001) and prolonged in 2004 (N411/2004) and 2007 (N231/2007). 
 
The overall budget of the new scheme is EUR 27 million over 3 years or EUR 9 million per year. This constitutes a decrease with respect to the initial scheme in 2001 (EUR 14 million per year) and its successors (EUR 11 million per year). The money is still distributed in the form of soft loans for project development, script writing, production as well as post production and the loan varies from 3 to 7%.
The loans are called 'zinsverbilligt' (page 2, N440/2001 ) and 'bedingt rückzahlbar' (page 2, N440/2001) which implies that that the interest rate is beneficial and under certain circumstances, no refund is required. This can be considered state aid, due to the fact that the 27 EUR millionconstitutes public money from the states of Saxony, Saxony-Anhalt and Thuringia.
 
The EC confirms that the public funding and the selective character of the measure are likely to favor a specific sector and potentially affects trade between member states as stated in German: 'Die Fördermaßnahmen werden aus öffentlichen Mitteln finanziert. Sie sind sektoraler Art und könnten durch Begünstigung eines bestimmten Wirtschaftszweigs den Handel zwischen Mitgliedstaaten beeinträchtigen.' (para. 7, N411/2004).

 
A state measure in the GTA database is assessed solely in terms of the extent to which its implementation affects the extent of discrimination against foreign commercial interests. On this metric, the state aid proposed here is discriminatory. This is not to deny that there may be other benefits from this measure.