French austerity budget hits CNC and broadcasters

The French government has confirmed it will impose an “exceptional levy” of €150 million on the funds of France’s National Cinema Centre (CNC) as a part of its drive to cut the country’s €1.833 trillion public debt.

 

The levy is one of a number of austerity measures due to hit the French film and television sector included in a belt-tightening 2013 budget announced by the Socialist government of President François Hollande on Friday.

 

The government said in a budget statement that it expected, “state bodies to participate in the recovery plan for public finances.” It added that the levy “was in no way a reflection of the CNC’s work in supporting the cinema sector.”

 

The statement said that the CNC’s working capital stood at €800m on December 31, 2011.

 

Other austerity measures include a 3.4% drop in funding for state broadcasting group France Télévisions – which includes the channels France 2, France 3, France 4 and France 5.  On the basis of the 2012 budget of €2.5b, this represents a €85m cut and is higher than the expected 3%.

 

France Television managing director Rémy Pflimlin warned French deputies at a pre-budget hearing on Wednesday that the planned cuts, “risked bring the group to a grinding halt”.

 

The funding cut comes on top of a €50m drop in advertising revenue in 2012, which is expected to remain at the same level in 2013.

 

Arte France also faces a 0.3% drop in state funding, which stood at €270.2m for 2012. The french arm of Franco-German broadcaster Arte received a 7.3% boost in finance this year.

 

The National Audiovisual Institute (INA), specialising in conservation, research and training in the audiovisual sector, received a 0.5% cut.

 

News that CNC funds were due to be siphoned off by the government broke at the end of the summer but the exact sum that was going to be taken was unclear.

 

In 2011, the centre-right government of President Nicolas Sarkozy took €20m from the CNC, after an initial attempt to siphon-off €70m resulted in protests from across the film industry. 

 

The funds of the CNC – which celebrated its 65th anniversary this year – are generated through obligatory contributions from broadcasters and taxes on cinema tickets and local Internet players distributing TV and film content.

 

French Culture and Communications Minister Aurelie Filippetti told Le Monde newspaper earlier this month that a “contribution” from the CNC was justified in the face of the “economic crisis”.

 

In return for the levy, the government has promised to overhaul the tax paid by Internet players to increase the contribution they make to the CNC. CNC president Eric Garandeau told Screen on the fringes of the opening of the Cité du Cinéma last week that the overhaul of the Internet operators tax would not be enough to replace the €150m levy. 

 

The French government announced some €36.9 billion worth of tax hikes and spending cuts on Friday as part of its bid to cut France’s budget deficit to 3% of national output in 2013 from 4.5% this year. Tax hikes worth €24 billion make up most of the deficit-cutting drive. 

 

Fresh figures from France’s national statistics office revealed on Friday that public sector debt rose €43.2 billion euros to €1.833 trillion, representing 91% of economic output at the end of the second quarter of 2012 – a post World War Two record.