Committee on Culture and Education Ordinary meeting
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CULT European Parliament
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Roxana Mînzatu
Good morning, and thank you, Dianella, for the invitation. Thank you.
To you all for engaging on our important common shared topics. Before updating you on my priorities for the months ahead for the year that is still ahead of us, before doing that and before presenting our strategy on intergenerational fairness, I would like to start with a few words on
the next MFF. We know that negotiations on the MFF have never been a simple affair, but high quality, accessible education, which is at the core of my mandate, cannot exist without budget, without investment. And this must remain a priority for the next multi-annual financial framework. And this is why, this year, for the first time, and I want to emphasize this with you and with every occasion that I have, we did introduce the recommendation on human capital in the European semester, a recommendation which has also been endorsed by council, in March. And looking at the next MFF and the national and regional partnership plans, we know that they will be based on country-specific recommendations, part of the European semester process.
So in this context, having the human capital recommendation to be used to steer the CSRs, to put education and training at the core of the national plans is quite an important objective and could generate quite an important impact in terms of investment, and that's why I emphasize it. We need, of course, your support to make sure that beyond these political processes that we have put on the table, we make sure that we deliver a stronger, more impactful, more inclusive Erasmus. Yes. We need education and skills to be prioritized across funding instruments, not just Erasmus, not just national regional plans, but all tools that exist in the MFF. And we need to make sure that there are real synergies between European and national-level interventions.
Now on Erasmus, I on Erasmus plus, I will not go back to numbers, the increased funding in the proposal, but I will say that, I hope that the outcome of the negotiations between the co legislators will further increase the allocation, thus allowing all of us to meet the huge demands that we know that this program creates because demands on Erasmus funds have many times been even more than four times higher than what we were able to provide. This additional allocation would help us deliver on another big, important priority to make Erasmus more inclusive. And despite our collective efforts to go in this direction, people from underprivileged backgrounds that are able to benefit from an Erasmus opportunity are still a minority. And my dream, and we are working to fulfill this dream step by step, and maybe in questions from your comments, we will address this, is that we build a direction into which every person from primary education to university, including VED learners, including apprentices, has access at least once in their lifetime to an Erasmus opportunity. Obviously, this would make the full potential of Erasmus contribute to the strength of the EU, making Erasmus evolve from an opportunity for some young people to a right for every young person in Europe.
Equally important, flexibility and simplification. They are part of the processes and of our work in the commission. The purpose that we put into text is to deliver a simpler and more streamlined regulation that highlights opportunities in all fields from the outset. Regulation that is easier to navigate, easier to understand, making sure that it serves its objectives and target groups more effectively, and effectiveness is important. The proposal of the commission does not aim to reduce visibility, as we discussed this many times, of any specific fields, to reduce visibility of youth or of sports or of volunteering sectors.
This is absolutely not the case. We clearly put text we spelled out in the text in the recitals of the proposals that the ambition for youth and sports will not be decreased. A special mention I would make on European University alliance, alliances which are part of your work as well, and they're very important to me. I need your support. I need the parliament support to ensure that we provide these alliances with the support they need to move to a next level from funding not just from Erasmus plus but also through programs like Horizon Europe for their research and innovation in an innovative dimension, like the new proposed competitiveness fund for closer cooperation with businesses, across the EU.
And last but not least, I would want to mention and welcome The UK's association to Erasmus plus for 2027. Later today, I will be part of the signing ceremony of this association process. The UK's association Jerasmus plus plus is an important political signal to our young generation. It will offer significant opportunities, on education, on training, on sports, on youth sectors, on both sides of the channel, open opportunities to attract talents, to exchange best practices, to develop innovative teaching and learning methods, and in the end, to strengthen Europe's position as a global education hub and as a global destination for youth. Turning on, turning back to my priorities for the months ahead, a few words on where we are today.
You know, more than one year ago, we had launched the union of skills with the ambition to boost investment in people. Looking at what has happened one year after the launch of this strategic document, we are seeing our work across Europe in improving basic skills because this is the foundation. This is the foundation of everything else that we want to do in terms of not just the lifelong education of a person, but also the democratic standing of a person. So basic skills work is very important. We are working and supporting member states.
10 member states are working closely with us in delivering tailored expertise so that we modernize teaching. We are investing through Erasmus Plus so that we raise skills where they matter most. And we are equipping teachers and learners to navigate the digital world, to understand artificial intelligence, to strengthen digital literacy, to build resilience against this information. You know, we've launched a number of guidelines just recently on these exact topics. We are making progress where I think it is long overdue, and I want to mention the gender equality in science, technology, engineering, and mathematics.
Well on track towards the goal that we set to have, 1,000,000 girls trained in STEM by 2028, by the end of '28. Since last year, we've counted an additional 280,000 girls and women that are supported to enter these fields. And this is obviously not just about equity and fairness. It is about boosting Europe's capacity to innovate and to compete globally. We are also strengthening the link between education and the labour market.
This is important. Universities and businesses are working together so that graduates with skills, so that graduates will leave the education system with the skills that the employers actually need. And then the same time, with Choose Europe for Science, we are helping European institutions attract top scientists from around the world. But, obviously, more is needed, and so I will go to the most important initiative that we prepare for the second part of the year. First, the education package, which I want to emphasize, programmed to be adopted probably in November.
This package is about putting initiatives that affect the classrooms, the teachers, and the schools. It's very targeted. Its aim is to modernize basic education to support teachers, to support schools. Some components that I wanna emphasize, the basic skills support scheme. Through this scheme, we are exploring the possibility of vouchers for primary and secondary schools that are committed to teaching and improving student performance on the five basic skills, as we've also mentioned them in the union of skills, on science, on digital, on reading, on citizenship, on mathematics.
On all of this, we want to accelerate through this scheme the proven interventions that improve the situation of the learners and to generally generate real evidence of what works that can be then used across our education systems in Europe. Another important initiative, European Schools Alliances is meant to turn local success stories into European solutions. And with the help of local authorities, we want to enable schools to join forces so that they can exchange best practices, so that they can improve their performances, they can evaluate themselves, participate in structured mobility schemes, basically to turn mobility of pupils and teachers in a structured way into lasting impact. Also, we will put forward in the education package the EU teachers and trainers agenda meant to support our teachers to make the teaching profession more attractive, with our social partners in education. Our intention and our work is structured in four directions to attract talent in the education area, to improve our teachers' education, their training, to set up counseling systems for schools and for schools' principals.
This is an important component. And, of course, to ensure mobility and recognition of the added value of this profession. And another important component, our 2030 road map for digital education and skills, through which we want to make sure that technology that is evolving in such a rapid manner is strengthening learning, is supporting the well-being of pupils, and it reinforces democratic values. And, I want to mention, specifically that to support the modernization effort, together with the executive vice president, Virkonen, we are working to create an e o Europe wide in Europe wide digital infrastructure, a consortium, as we might call it, that is going to be accessible to schools all across the European Union. On this platform, schools would be able to access professional training programs for teachers, modern teaching modules on different competencies, digitalized programs created by European ed tech companies because we want to motivate the creation of European teaching interfaces that are at our standards on data protection and online protection of minors as well as other facilities, but could also access on these platforms products in the field of artificial intelligence and literacy programs.
So in the next couple of months, three or four months, member states must express their willingness to participate in this context. I will have later today a dialogue with the ed tech sector, education technology sector in Europe to discuss some of our directions, and we are looking forward to build this concept. Turning to vocational education and training because this is also very important in the work of this year. We know that Veth has suffered from low visibility, from outdated perceptions, that we need to change that. So later this year, we will present a new, European VET strategy with the mindset that VET must be as higher education as a first choice, not a second option.
And this is not just about education policy, because we know that two thirds of labor shortages across Europe are in jobs that require vocational education. And it is in those sectors that keep our economies running, that keep our societies functioning and delivering, in construction, in health care, in advanced manufacturing, in clean energy, in transport, just to name a few sectors. We know that Europe does need more electricians, more welders, more care workers, more technicians for batteries and renewables, more logistics specialists. So this is about looking strategically also at Europe's future, but at each individual's future as well, and about providing quality, inclusive vocational education in Europe that is also connected with career opportunities. Honorable members, Europe's future depends on its people, on their skills, their creativity, their ability to adapt and innovate, and investing in education is the most strategic investment that we can make.
We've made a strong start with the union of skills, and now we must accelerate, deliver the results that citizens can really see in schools, in opportunities, in a more competitive Europe. I look forward to working closely with you on each of these initiatives and to making these strong topics deliver. Now a few words on the intergenerational fairness strategy, which I understand the committee would like an update on. This has been presented on the fifth of March. It is about how we are turning into reality the principles of solidarity between generations today, and the responsibility towards those who will come after us in the future.
Intergenerational fairness may sound abstract, but it isn't. It is a logical and urgent process. Momentum is building around climate change, around demographic change, around the geopolitical situation and conflict, around digitalization, precarious labor markets, rising cost of living, and about how all ages are facing all these complex challenges, putting a strain on the balance among generations. Intergenerational fairness is clearly rising in the public debate. Several countries have already embedded it into their institutions and policy-making processes.
The United Nations has recognized the importance of the declaration on the future generations. And the strategy that we have adopted on March 5 is, by these standards, the first EU level policy document framing this concept. And it is, first of all, a strong political commitment. Now at the heart of the strategy is a simple image, and I've mentioned it in the press conference when we launched the strategy. It's the empty chair at the table, as we call it.
The chair that represents or should be occupied by those that are not yet born, by those that are much too young to speak for themselves, to defend their cause or their interests, but whose lives and whose destinies will be for sure shaped, by the decisions that we are taking today. So our responsibility is clear. It is to work in a way that today's decisions do not become the burden for tomorrow's citizens. The arguments being, obviously, not just economic, but also essentially democratic ones. It is clear that when young people feel excluded from decisions, when they cannot participate to shape their future, they disengage.
So this is why we approach the issue of intergenerational fairness from two angles. First, embedding long term thinking into our policy making, and this is a process that is already, I would say, evident, for example, in the union of skills. But second, amplifying the voices of young people. This is an important angle as well. While future generations cannot speak and they cannot have a seat at the table, the children and the young generations, people that are with us, can do this.
And they can be the closest proxies to future generations, so that they amplify the voices of those that need to be protected. Strategy is centered around the need for a new intergenerational contract, and this is not about a legal contract, but an agreement between generations built around three priorities. Fair policymaking, which is about putting long-term thinking at the heart of our decision making. We plan to do this by reinforcing our foresight in our policymaking by continuing to apply the commission youth check to assess how policies affect younger generations. We propose a new intergenerational fairness index that will help us to identify opportunities, to identify gaps so that these inform policy decisions, so they promote fairness across generation, across our policymaking.
Then fair opportunities that unite generations around the shared goal for a better future. This means lifelong learning for all from early childhood to adulthood, and programs like Erasmus are already making this a reality, but we must make sure that every person, regardless of background and of generation, can benefit from this approach. Then, fair places. This is another pillar of the strategy, recognizing that geography matters in shaping people's life chances and that opportunities do not and should not depend on where a person was born. And here, the voices of the future initiative will bring generations together to reflect on the future of their territories, and it is an action that is done in partnership with the committee of the regions.
To give you some concrete examples, some of the new elements that the intergenerational fairness brings to youth policy include the life course, life cycle approach, which means that policies should support people as they move through different life stages from childhood and transition to adulthood to older working age and to retirement. The objective of breaking the intergenerational transmission of disadvantages, which builds on the evidence that positive interventions early on put children and young people on a better path in life, and intergenerational solidarity and cooperation, which help build social cohesion. And on the other side, the strategy on intergenerational fairness also looks into the challenges that are faced by older people. While the strategy has the strong youth dimension, it does highlight the needs of the old people of tomorrow. And the strategy also announces actions that are oriented towards the interests of older generations and looking at aging in general.
Member states are already putting forward important actions when it comes to age equality, and this strategy aims to highlight this work by developing a compendium of best practices. And in addition, the longevity roadmap, which is proposed in the strategy, will map age-specific policy issues for all age groups so that we can identify strategic opportunities to shape together longer, healthier, financially secure lives. And this longevity road map is planned to be adopted in 2027 second quarter. Further to these actions, I want to also mention that we will adopt in May our strengthened child guarantee that is meant to prevent and fight child poverty, social exclusion, and ultimately has the goal to break the intergenerational transmission of poverty. This is the quintessence of the intervention of the child guarantee.
And more broadly, the antipoverty strategy will address the root causes of this challenge and will adopt a long-term perspective, a life cycle perspective to tackling poverty. And this is another example of how we embed intergenerational fairness into our policies, different policies, at European level. With commissioner Mikhalev, we will work on strengthening the intergenerational fairness dimension in, also a very important strategic document, the post-2027 EU youth strategy. To conclude, I think that it is important that the success of this strategy is measured, and we are able to create it by working at all levels, by promoting it at all levels. I'm absolutely convinced that European parliament will consider how intergenerational aspects can be further taken into account in policy making.
It is important that we are focused as we are looking at these, maybe a bit more philosophical than reality, very concrete, principles of work, intergenerational fairness. We must stay focused on delivering results. We must always consider ways to increase our ambition and skills. And I finish with what I started. Budget and investment will always be the most important tools that we have at our disposal.
So with that, I'm looking forward to engaging with you on these topics.
Nela Riehl
Thank you very much. I will switch to German again. Yes. Well,
Thank you very much for that presentation. And that brings us now to the questions from the coordinators. Let's start with the first four groups, and then you'll be able to answer those first questions before I hand over to the next group of questions, and then we'll have our catch-the-eye. So let's start with the EPP, but the gentleman is not here. Mister Taro is not here, so Mister Boyevsky will be asking the question for three minutes.
Bogdan Andrzej Zdrojewski
Yes. Thank you very much.
I would like to thank you, commissioner, for giving us this presentation of the state of play of work when it comes to those issues which are very important for us. We're extremely satisfied and very happy to hear about the efforts that you're making when it comes to the changes to the budget. And I'll start with the budget. Without a doubt, the budget at this stage is not satisfactory. It's not tragic nor dramatic, but we can't really be that enthusiastic about our opinions about this budget.
We should really be thinking in terms of €50,000,000,000. We know that you, Commissioner, have said yourself that the discussions and talks on the budget are very difficult. There are very many issues and everything is difficult given the extraordinary times that we're living through. But we have to focus on things like the Erasmus Plus program. This is the best program, most effective program that has performed best. And it's like a very visual visiting card, if you will.
Euros 1,000,000,000 is about 1.5% in terms of satisfaction. If we had €5,000,000,000, we would be able to overcome the barrier of being able to garner greater satisfaction amongst young people and students to be able to give them opportunities. So we would very much welcome all your efforts to fight for more money. And then I'd like to say something about grants in the strategic sectors. We'd like to know how these sectors are going to be financed, not from Erasmus Plus, hopefully.
We would hope that when it comes to grants, these are, well, under some of the programs that exist, they are higher than you would get under national programs in these strategic sectors. And I would just like to say that we are in favor of these grants because grants for those who have the best qualities and skills, yes, that's good to further those, but we need it for all students. We know that the United Kingdom is going to be rejoining Erasmus plus, and they're going to be participating under specific conditions, almost the same conditions as other member states. But I'm wondering whether you do not fear that this participation of The United Kingdom may affect other countries. And then, of course, we have to cooperate with the higher education institutes.
We need to have more synergy. We don't want things to disappear into the backdraw. And I would very much hope that the program is going to be flexible enough so that the administrative burden is reduced to possibly a little bit. Thank you. Thank.
Sabrina Repp
you. And now we have from the S and T, Sabrina Rett. Commissioner Roxanne, thank you for being here today, and I'm delighted that we can have this exchange together. And I show, I think that goes to show how important working together is, particularly with regard to Erasmus Plus and with regard to our teams. And so, mister Zoroiski, who's also the rapporteur for this matter, I agree with what he said, and there are a couple of points that I'd like to highlight.
Speaker 6
He spoke about the full time as Dependium, and we can see that is going to be replacing part of the mobility side. And in fact, this full time thing, the way it's built, I think we need to know if it's going to be possible to have different categories. Maybe, young people who are at a disadvantage, people from rural areas, and we could maybe highlight their issues and that these people can be included in this program. And it wouldn't just be to do with initiatives within the area of excellence, which I know was the original plan. But, I think that we need to have better access and a more balanced approach.
Sabrina Repp
And also, there's the side of mobility. There's another point which I would like to highlight, and that has to do with how we are actually going to be able to have in the negotiations specific earmarking and particular chapters. So we think it's very important for there to be specific budgets for youth organizations, sport, and we have to be very clear that we need these specific budget lines. And so I'd like to hear what the commission has to say about these matters. We've also been looking at the European Solidarity Corps, which is to be integrated into Erasmus Plus.
And so I think that this really has to do with the core of the voluntary work. And, I think that these two programs, Erasmus plus and the European Solidarity Program, should be able to learn from each other and should really be at the core of the European solidarity core. And then I'd just like to also ask how all of this is going to be guaranteed. We're going to, we've heard about the various budget sides of things. And, with regard to the fact that we need €50,000,000 for Erasmus plus, that's what we need.
And so what I would like to know is a little bit of inside information, if you like, how the commission is going to deal with this because we can see that there's an imbalance with regards to cutbacks in various areas, agriculture, for example. And in other areas, budgets are going up. And so we do have this fear that maybe the budget of Erasmus Plus might also be cut. And so we want to make sure that this does not happen and that our concerns are dealt with and that we do actually get 50,000,000, because there really is a huge need here for Erasmus plus, and that really must be our priority. And so that is what I want to ask you.
Nela Riehl
Thank you very much. Thank you, Sabrina. And now from PFE, I see that we don't have anybody here. So that brings me straight to Miss Magoni from the ECR.
Speaker 8
chair. Thank you, commissioner. I'm sorry that I was late, and so I wasn't really able to listen to everything that you said. But nonetheless, I do have a question. So I hope that it is relative to what you were talking about.
You were talking about the intention of presenting the agenda for trainee people during your intervention? And if you could, answer, because I think this is a very important matter and functional, this whole question of intergenerational exchange, and also the other specific provisions for people who are giving up working in the area of education. Then in 2025, out of 5,000,000,000, there were 6,000,000 that were destined for sport. Now this is a very important sector for Europe, and so maybe there could be more money dedicated for sport. Thank you very much.
Nela Riehl
Yes. Well, that was quick. So thank you very much. Now we didn't have all our groups present, but you can answer now, then we move on to the other groups. Thank you.
Roxana Mînzatu
Thank you so much for your topics and your questions. Some messages on my side, first of all, on Erasmus. The increase that we put on the table, of course, in a reinforced Erasmus, in a more flexible one, many Erasmus that includes also the European Solidarity Corp is 41,000,000. More could be achieved in the negotiations. More is needed, as I have mentioned.
The whole political setup in when we worked on the proposal was one with a lot of support for Erasmus. So I have full confidence that also in these negotiations, which are tough, of course, and where we need to look at the overall picture at the revenues of the budget, at the general size of the budget, and how it is linked with the proposal for each program, I have the fullest of faith that investments in the young generation, in the education of our young generation, in the mobility dimension is politically safeguarded and important. But, of course, on our part and my team's part, we support the co-legislators to negotiate, there's full support so that the final result is an outcome that is better than what we put on the table, of course, that is important. Now looking at how, and I want to emphasize one thing about Erasmus and the inclusiveness part. I've worked bits and pieces, some progress this year on the inclusivity of Erasmus.
You know, I've said how important it is that we combine it. We can amplify the size of the budget also by combining it with other funds. And we see results. I was looking at member states that top up scholarships in Erasmus with European Social Fund Plus. We've just recently had and I have to give this example because it is from my country that I come from, from Romania, but it is important that they manage to deliver a mechanism to top up with €500 for students from difficult backgrounds.
They top up with €500 from ESF, the Erasmus scholarship, so that these students with reduced opportunities can benefit from Erasmus. This is just the most recent of examples, but we have a number of member states that are using and moving, and my work is towards this direction. And, of course, we cannot add billions from ESF as we transfer them to Erasmus, but there can be significant financial flow for the inclusive inclusivity part of Erasmus, and this is quite important. Then looking at our association with UK and all our international dimension of Erasmus, because there are two important topics. First, on the UK side, they pay an entry ticket.
As we all know, there were tough negotiations on the trade and cooperation agreement between the EU and UK. And, The UK will pay 650,000,000,000 euro entry ticket or budget for their association, for their participation for the 2027 with a rebate of 30%, similar, I think, to Switzerland, but they do come with the contribution. And together, with the wealth of opportunities and of talent, and to emphasize this as how important it is because we are Europe. So, obviously, the EU and UK together are an important partnership, and Erasmus needed to reflect that. But there is no financial impact.
As there is no financial impact, for example, looking at how do we use Erasmus in different parts of the globe. For example, with the platform Mediterranean, there was such a big discussion that there is a dimension there where we support mobilities from Mediterranean countries to benefit from Erasmus opportunities, but the budget is not core Erasmus. The budget is from the specific neighborhood program, Future Global Europe. So this is not touching in any way the financial structure for our internal EU mobility, but it has a dimension that is international, Erasmus, and it is important. It makes it the strongest global program for cooperation and mobility of youth, and we need to keep it that way.
Then we proposed indeed these scholarships, the STEM scholarships as I was having trouble to understand the translation, but it is about the I understand your questions and concerns about these scholarships. In strategic sectors where we lack talent, where we lack skills, where we want to help our own students to stay and choose Europe, the excellent students. But coming from, it's not just about excellence. It is obviously about sectors which are strategic for Europe, and it is also about talented, brilliant students that have a financial difficulty. So, obviously, this is the connection.
So it is about specific sectors that are important for Europe's strength. It is about brilliant minds, but it is about financial need as well. So that is the architecture of the proposal that we put on the table and the way to say that EU and Erasmus invest in you, invest in you to choose Europe, to stay in Europe, and to be able to contribute to exactly those strategic sectors. It's not gonna be about all educational pathways, but those pathways that are related to clean energy, that are related to AI, that are related to, but it doesn't mean that it needs to be, you know, fully dependent on the STEM dimension because working on AI has such ethical, democratic, you know, humanistic dimensions as well. So it is about that.
People, young people that are talented and gifted with financial needs, with financial limits in which we want to invest. And we propose to introduce these scholarships, in Erasmus. A fixed scholarship depends. We work on that it will be a fixed scholarship, a monthly scholarship that will cover the expenditure of the students throughout their education time, whether it's two years, whether it's three years, four years, with a monthly amount that would generate a total allocation per student. The simulations that we've made would mean €1,000 per month starting from '25, 4 months depending on the duration of the studies to up to maybe four maximum of four years, forty-eight months.
So you multiply 1,000 with the number of months, and that would give you the total investment, the total value of scholarship that you offer to that student. But, again, it is about the brilliant minds, the young people that maybe, through Erasmus, discovered their journey and then, discovered how they can, you know, maximize their potential, then they might choose to simply leave Europe or to simply, or could not be afforded in Europe the possibility to fulfill their education and their potential. So this would be the investment that we look at in terms of scholarships. Synergies are important, and you've mentioned them, and I emphasize it a lot. Synergies with the competitiveness fund, synergies with the Horizon program, with the national and regional partnership plans, it's going to be essential.
Education, supporting youth, supporting sports, they are not only in Erasmus. We can and must continue to support them through the European Social Fund Plus, for example, in your national plans. It is quite possible. On sports and actually on the structure on Erasmus, I go back to the same simplification flexibility narrative that I presented before, that in terms of structure of budget, we will have separate education training youth sports. But in terms of visibility of an earmarking, we propose a system that would allow us to use the working program, the annual working programs so that we can adjust to different priorities and to be able to set the numbers, in a way that is very responsive to the different realities and priorities with safeguards.
So as we said, safeguards on sports and youth. No go, not going anywhere in any way or shape lower than what we have before, but going higher. For example, we proposed mobilities for athletes, which is a novel initiative on sports exactly because we recognize the importance of sports. You will see in the antipoverty strategy, just giving some hints, initiative on sport. Inclusion through sport is important.
So we can amplify. It is not only about earmarking because, again, the whole vision of the MFF is to make it and to keep it flexible and to have the Erasmus and European Solidarity Corp in a single menu for young people reinforcing, volunteering, training, mobility in one package. We thought it would offer not just simple access to the EU opportunities, but stronger calibration of the support we give to our young people. And just a few words on the teacher and trainer's agenda. It will be part of the education package in November. As I've mentioned, we're working on four angles.
One angle is exactly to attract people in the teaching profession and to prevent the leaving of the teaching profession. So we are working also with the social partners on this aspect. We are aware of the leave rate, of the abandonment rate, and this is, this is going to be quite central to the teacher and trainer agenda. Still working on it, but this component is one of the four pillars of the document.
Speaker 11
Move on to our next four colleagues. We start with Miss Vaughan from Renew. Thank you very much, Vice President and Chair. Now with regard to Erasmus plus, I think that what we can say is that after this election week, the European Union may be able to build its mobility map with the return of the Hungarians. And I do really hope that the rule of law will make its comeback in Hungary, and in particular to universities in that country.
Marie-Pierre Vedrenne
I'd just like to ask you a question about Serbia, which is the third country and which does nonetheless participate in Erasmus Plus programs. And students there are being subject to attacks because, we also have levers to intervene. And I'd just like to know how the commission is going to react to that. Now that's the first part of my question. I'd also like to talk about the matter of inclusion, which you mentioned in your introductory remarks.
Speaker 10
And I think that's the key subject today. This inclusion should make it possible for all young people to access European mobility. This is something that's very important, and it's a vector for education and openness. We saw in the past in past programs that sometimes there aren't joint indicators with regard to this matter of inclusion because national and regional agencies don't have quotas or don't have specific procedures. And when we looked at this subject, we saw that it's something that is not really standardized.
Marie-Pierre Vedrenne
And so what we'd like to know is in the text that we have, and with the new procedure, it doesn't seem to be any more specific. And I'd like to know how we can move forward with regard to this in the negotiations, which we'll be starting. You also spoke about the question of simplification. And here, this is a key subject for us, which should make it possible for smaller associations and groups to participate. And then you also spoke about Romania, where there is a possibility of tying together FSE and Erasmus.
And we have been looking at this for some years now, and I'd like to know once again how that could be looked at. Now it is true that it's very difficult when we're talking about inclusion to have the ambition. And on the other hand, the budget, which is built around better flexibility and less predictability. And I know that when it comes to inclusion, things are done in the long term, and in particular when it comes to smaller groupings and sometimes further away, further removed from larger towns. Thank you very much.
Erik Marquardt
And now we have Eric for the Greens. Thank you very much. There's been a lot of interesting questions asked, and so I'll be very specific with my question to see how the new Erasmus Plus will be able to have access to money, something that we have been looking at. And we've heard concerns from the European Youth Network that getting rid of the youth chapter, it's going to be even more difficult for youth organizations to build projects and to be able to guarantee these programs using Erasmus Plus. And it's true that larger structures and universities, because of their size, are going to have more opportunities to put together applications to get money where smaller organizations don't have these structures to be able to make the necessary application. I don't think that was the intention to make, to block access for smaller youth organizations, but nonetheless, I think it's very, it would be very positive if these people were able to take advantage of these projects.
And so I think that we really need to work on the structures so as to be able to make this possible. And for that reason, I'd be very interested to know what thoughts you would have on this question with regard to Erasmus Plus. Thank you very much. And now we have Missus Moracci from the left.
Carolina Morace
Thank you, chair. Now today, we're talking about inclusion, and you too, commissioner, refer to inclusion in sport. But there's a big contradiction here. To talk about inclusion in sport and then exclude athletes from sports events is a contradiction. But anyway, I'm not going to focus on sport today.
Now the attention which the commission is giving to Erasmus Plus and to intergenerational equity fairness is going in the right direction. We're talking about the future of the European Union. We're talking about the trust which new generations have in the European project, which is why I think we have to go further. There is a risk here. The intergenerational concept of fairness is an objective, but it's not very binding, and it's not very clearly defined.
And Erasmus is one of the most interesting projects which is provided by the EU. It offers opportunities. It builds a European identity. It creates skills. But we can't ignore what happens afterwards.
For many young people, when going from training to the workplace, there's a lot of uncertainty. There are a lot of precarious conditions, uncertain traineeships, and placements. So there's a gap between what is offered and what the real opportunities are. So if we really want to improve the situation between generations, we mustn't confine ourselves to simply providing access to programs. There must be fair conditions throughout the lives of these individuals, because otherwise, we won't be offering stability, and this will inhibit and hinder the European project, which is why I'd like to raise two questions.
The first one has to do with the effectiveness of current projects and programs. What does the commission intend to do to ensure greater integration between programs for young people, particularly between Erasmus Plus and the Youth Guarantee, particularly given that there are clear gaps which have emerged regarding these instruments, a lot of young people don't manage to find a stable job on the labor market, that percentage is still too high. Then what about the guarantee instruments? What are the instruments there? What measurable instruments, what binding instruments, if necessary, are you planning to ensure that European investment does lead to dignified working conditions in the long term, as opposed to very short-term results.
Without a system which can be checked, we won't really be able to provide the replies our young people are looking for. Thank you.
Now,
Miss, would you like to ask a question?
Speaker 16
Sorry about being late. Unfortunately, my flight came in later than expected. From the perspective of sovereigntists, we feel it is a concern that the commission and the EU try to overreach in the area of education and culture. The youth policy efforts should not go beyond coordination, especially in curriculum, in values, and in the definition of the structure of education. We still see that through the tools of financing, the commission is trying to put political pressure on these areas in tenders, and they provide support for ideologically friendly programs.
But I can also mention the exclusion of Hungarian students from Erasmus. Of course, after the elections in Hungary, we see whether the commission has had actual professional complaints or only political preferences. I am dying to see that. Now my question is where does the commission draw a line between coordination and intervention in educational policy at the national level. Also, you are responsible for the demographic issues.
While the EU often considers that migration could be a solution to resolving labor force issues. We believe in strengthening families. How will you support, and will you support this cause, making sure that we don't only help integration but also national member state programs, strengthening families. Also, on the traineeship directive, I have a question. How does the commission wish to avoid a situation in which stronger regulation, stricter regulation, limits the opportunities of younger people to enter the market, especially in small and medium enterprises?
Have you made an impact assessment about how many traineeship positions could be impossible to take place because of these strict regulations?
Now.
Nela Riehl
We have to catch the eye. And so before that, you have the opportunity of answering those questions.
Roxana Mînzatu
Yes. Thank you. We are monitoring the situation, in Serbia. Of course, it's a question of due process, of legal process, and it's of the utmost importance that what happened there is investigated and that rights are protected and that rule of law is enacted. And that means that, you know, those that are responsible for anything would pay, and those that are vulnerable are protected.
It is absolutely, at any time that I see, and of course, young people should be the ones that are voicing their concerns and their position with the most of passion, but it is always disheartening when I see students and young people part of this, yeah, unfortunate and absolutely concerning cases. So what we can, what I can say on behalf of the commission is that we are looking at the developments of the investigations that are happening with the University of Belgrade and with the student there, and that is all that I can say at this point. With Hungary, it's the same answer that I've given all the time. On Erasmus, no money has been lost. No money has been lost.
The money has been reused by entities that are respecting the enabling conditionalities, the horizontal conditionalities. We are hopeful that the government, and this is a new government, but as we were before, we are now hopeful that the government will remedy what needs to be remedied so that all universities, including those that are held by these pits, are in respect of the EU values of our charter, of all the conditionalities, so that access to all types of opportunities is ensured in these entities as well. But we are standing ready to work with the ministry ministers, with their teams as we have done so before, and it is a question of very technical work, of very detailed legal work, but it is a question also of political willingness, that when you use EU funds, you also adhere to EU values that generated this political union and these programs and these opportunities. On the inclusivity of Erasmus and the more comments that have been made on the access of small organizations to different opportunities, and different components as compared to universities and bigger entities. Our work is continuously trying to improve the simplification process, and which is not just for smaller or bigger organizations.
It's for all beneficiaries. With my colleagues, we are working to diminish the number of procedures and of paperwork between the agencies and the beneficiaries to use more digital tools. We've introduced the accreditation mechanism exactly for this purpose, to make it simpler and quicker, but not to exclude or to make it accessible for all organizations. So in no way or shape or form is our intention to, you know, to shape a program that is more prone to be used by bigger or stronger organization. It is going to be implemented with the same mindset, with the same structures, with the same calls for proposals that we have had so far.
But in addition, with also my personal engagement with our colleagues in the services, make it simpler, make it friendlier for the beneficiary. Let's make it, make the most of the tools that we have, including AI tools, so that we make it more friendlier and easier. So how much money do we have? How simple it is to access it? These are the two topics with which I work.
If many times maybe we see an emphasis on education, it doesn't mean that the emphasis on education is about, you know, competition in Erasmus to take resources and from education is fundamental for sports people, for culture people, for engineers, for health care workers. So, obviously, it's not an idea of going towards universities more than towards other types of NGOs or ecosystems of beneficiaries. It is a fundamental truth that it is in this very transformative landscape, very dynamic, in which we need to empower our citizens in face of so many challenges. Continuing to invest in their education and in the standards and inclusivity of an education remains the cornerstone of everything we do in all policies. And it is so happening that part of Erasmus, but it's not just the responsibility of Erasmus, is also to improve outcomes on education through education mobilities, but it is also the task of other financing programs.
As I've said, I believe that there's much more to be gained out of the added value of synergies. Then on, and this is a very good question. Thank you. On the integration between Erasmus and the youth guarantee and how we connect all these tools, because we have this discussion as we work on the antipoverty strategy, which will be presented on May 6 with a reinforced child guarantee. And what I was discussing with my colleagues, we have a child guarantee, youth guarantee.
We're working on the skills guarantee for workers. The added value that we need to bring working with member states is the connection between them, how easily you can make sure that you connect all of these interventions. Or, for example, we have the ALMA intervention, which is for young needs, those young people that are not in education, not in training, not in employment. The numbers are so high in many member states, and we have an intervention that is tested. That means support to train them, to give them an apprenticeship, to give them access to a job, plus mobility, which is borrowed from Erasmus.
And we are trying to encourage member states to use EU money and their resources to use this ALMA approach, and to use mobility as part of the solution to improve the chances for these young people to get the right job or the right perspective without obviously losing them. So with this right to stay in our mind. So I am working on this connection because it is absolutely important to reinforce the work on the needs of the young people that are not yet being supported enough. And it's one of my political priorities. Erasmus doesn't have the mission necessarily to do that, but there is something out of its spirit that can be borrowed for the interventions.
And we are trying to extract the benefits of mobility to integrate them into our work on youth mob on youth and on
Roxana Mînzatu
Unemployment interventions dedicated to youth. So some of these things, I hope you might see in the anti-poverty strategy. Some we will still be working on. Obviously, we are not here yet with a proposal with intergenerational budgeting mechanisms. We are also constrained by the legal treaty, you know, provisions as to the generations that are now part of society, and how we are able to tackle them.
But we are doing our best in education, in antipoverty, as I've said, just to give examples of my direct portfolio, to have this lifelong life cycle approach, very well visible, structured, and the policy interventions exactly shaped like that from young to old age. We are not trying to create a curriculum at European level. We cannot do that. It's not your competence, but we are trying to use cooperation, exchange, mobility so that schools, teachers, universities can share the good practices on AI in education. It will be paramount that we not just give guidelines, but maybe we use the European School Alliances.
We use everything that we can so that these schools can come together and share how they teach, how they adapt, how teachers adapt their styles. And then they can, of course, share, export some of these ideas, but it's voluntary. Whoever wants to choose a new topic, a new method, a new guidance can do it. The EU should offer these resources. So it's not imposing them, but it's offering access to essential resources, especially with the AI transformation, but not only. So this is what we are doing, a strategic impactful coordination, not nothing more.
On demography, our work is ongoing on child care, and you will see also the European Care deal on the quality of jobs because families and households depend on the jobs and the salaries of the people that are part of it, and the quality jobs road map and the act that we will propose in December are part of this effort. The antipoverty strategy will have a household dimension as well because we are looking at the cost of living and how we can support households so that they face some of the challenges, the increased prices, access to houses, and homes. So, really, our approach to that is quite pragmatic to supporting families on what matters to them. Mothers that have, you know, the possibility to take their children to good childcare facilities is so important. And EU is contributing with EU funds, but we will also contribute with improving working conditions of the carers, and this is important as well.
The traineeship directive proposal, which is negotiated, is not meant to limit access to traineeships. It's meant to increase the quality of traineeships and to eliminate the abuse, the unpaid trainees, the disguise to work on the traineeships. This is the purpose, but let us see what the outcome of the trialogues will be. My wish is that it is a directive that really improves the life, improves the working situation and the career perspectives of trainees, because they have the same rights, and they need to be respected. And that's what I hope the outcome will be, but, again, negotiations are ongoing. Thank you.
Nela Riehl
Thank you very much. There is a very brief opportunity to catch the eye. So any members asking for the floor, please be very brief. Hopefully, we'll take everybody. Hannes Heide for the S and yes.
Hannes Heide
Thank you very much for this opportunity. Dear Vice President and Commissioner, I'd like to thank you for your very clear statements that we heard today. And I would like to stress what you have said, that every European should have the opportunity to avail of Erasmus plus once in their lives, which means in Austria, we have to double our figures. And in order to do that, we need a budget which is twice as big, or at least enough so that we can achieve our goals. And I would like to agree with Moistas Droyevsky said and the other colleague, summarizing what we've heard today.
Speaker 23
We need clear earmarking, and we know there is a degree of skepticism to finance university grants from Erasmus Plus. Obviously, mobility is important. But if we do want to make it possible for everybody to be mobile, there are certain conditions and requirements that have to be met. This has to be guaranteed as well, because education depends very much on one's social origin and which region you come from. In Austria at the moment, there's a current study that's been published, which says that 42% of young people are not satisfied with democracy compared to the last opinion poll. Then this is a drop from 70%. 70% was the degree of satisfaction the last time around.
Hannes Heide
So political education and how to deal with disinformation, digital skills, these are all very important, and especially for young people because they don't have sufficient digital skills. We know that the commission has come up with guidelines, published guidelines on AI, digital skills, and we want to make sure that these instruments get into the classroom and are not just at some theoretical level. How can we do that? Then, of course, there's the University Alliance and the European degree label. What is the timetable for all of that?
Speaker 19
And what kind of barriers and obstacles would have to be overcome in order to achieve this? But thank you very much anyway for your very clear messages. Mr. Papandreou.
Nikos Papandreou
I'll give my translator an effort to speak Greek.
Yes. Thank you very much. I'd like to thank you, commissioner, for your excellent presentation of all these issues. I listened to what you were saying very carefully. And, obviously, you very with your issues.
You know what you're talking about. But I think the elephant in the room, if I could call it, is I'm a father myself. So I think the elephant in the room is the mobile phone in the classroom. We know, of course, that recently social media has been banned for young people under the age of 14. But I myself go into schools, and I can see that the parents and the teachers need help and support.
Speaker 20
So, what is your view on this? Should we be informing children that they're developing a kind of addiction? Thank you. Mr. Archer.
Speaker 22
Thank you, madam. Madam Mezzatu, welcome to our parliamentary committee. Last month, this parliament approved the resolution on copyrights and generative artificial intelligence. So the message was clear. It is necessary to ensure clarity and a fair allocation of funds when authors have their works used for artificial intelligence.
I support the development of artificial intelligence, of course, but not at the expense of European creators. Last year, you and Commissioner Michele promised a specific strategy on artificial intelligence in the sectors of creativity and culture. That's very good. But it is based mostly on codes of conduct and protocols, and it is not practical for smaller creators. They are just powerless against the big technological companies and big copyright societies.
That's why I would like to ask when the commission will come up with a proposal that would cover the challenges before the creative sector? And these proposals should be accessible to small and medium-sized enterprises and small creators, not only serving big creators and big enterprises.
Speaker 21
You. Yeah. Well, we have six minutes left, so a very brief reply to those comments.
Sorry.
Roxana Mînzatu
No. I speak for so long. I So, yeah, we would definitely, Hannes, need to double, triple, and probably more the figures for Erasmus for this vision. Erasmus is once in a lifetime for every young person. But I always made it clear that we need to be pragmatic and take it in steps, probably not from the next MFF.
But if you put the vision out there, then the next MFF could be a strong contribution, but you are absolutely right. On earmarking, again, there is a negotiation ongoing, and outcomes could go, you know, in ways that you and the council want to. Our rationale was to have flexibility in a context of difficulty to create, to construct the budget, to have flexibility to allow for the budget to be really directed year after year to needs that are reflecting the different situations, but without affecting, in any way, the visibility or the ambition of the four of the four strands. We will see what the outcome will be. Again, we stand ready to support your negotiations so that there is an outcome as favorable as possible to the stakeholders, to the young people in the end, to the beneficiaries, because they are the ones that need an accessible Erasmus and one that changes their lives for the better. I want to emphasize again the work that we do on basic skills on citizenship education because you've mentioned the trust or distrust in democracy.
This European school alliance concept that we plan to launch beyond what we put in the union of skills with the European schools alliances. But not only through this tool, we want to encourage our member states to work on this citizenship skill, which is a basic skill. How we define it, because it's not easy to define it, what tools we use to engage with our learners, how we equip and train the teachers. This is quite the topic on citizenship as a basic skill that is to be, I would say, much more visible and so needed in our work, in education. But, again, Erasmus in itself with the mobilities absolutely breaks many myths and many obstacles in terms of distrust in the democratic mechanisms, and that's why a stronger Erasmus is the best antidote to what you've mentioned about Austria.
We are working, of course, so that our guidelines on disinformation on AI reach teachers. So we have so many platforms and networks, European education area structure. So working with our member states that these tools that we put forward really are accessible throughout the European Union. But, again, European school alliances could be a much welcome step forward so that everything we produce at EU level much quicker and with more impact is arriving in the classrooms and in all schools. European university alliances, we continue with the 65 plus the seals of excellence with the funding in Erasmus.
The timetable is the MFF timetable, trying to get more out of the competitiveness fund, out of Erasmus, an integrated investment pathway. We are also working for their legal status option. So work is ongoing, meeting with them this year in June, trying to deliver on that promise that they are essential for our competitiveness and our democratic resilience. These European university alliances, they're not just a nice-to-have concept. Then on social media, I must say, I have mixed feelings, I will say.
On the one side, of course, restricting access is part of the solution, but it's not gonna solve it fully. We see many member states. They are restricting it already. Our president, president von der Leyen, already works with the board of specialists about what we should do at the European level so that we avoid fragmentation. So by the end of this year, I think, you will see the outcomes of the work done by this board and the initiatives that will be grounded on this work.
But I think the responsibility of platforms is equally important, not just the education side as well. And I was looking at results very preliminary in Australia, and, you know, they are mixed. They are mixed. But totally true that we need to intervene, and this is, again, a work that we need to do with platforms in all impact, not just for children, but also for adults. Addictive algorithms, addictive models need to be identified.
We have legislation in the EU. It is applied and needs to be continued to be applied because this is affecting the mental well-being, mental health, and many times, democratic processes, in ways that it shouldn't. Europe has these legislative guardrails, and it's only fair that we stay human centric in this way. It is my opinion. Then the last question on, well, we have the culture compass on the work that we need to do to protect our authors, our creators, because I do think that they can be empowered with AI, but they are also at high risk.
So this is a work that my colleague, Glenn, and I are doing together. We do have an AI strategy for the cultural and creative sectors planned. It should be released the first quarter of next year, 2027. The next year, we come also with the EU artist charter, the one that we've also debated with the artists. They are deliverables of the Culture Compass.
I think we need to talk more about the impact of AI on culture. It's even more urgent, dramatic, and important than education. And, this is a topic where your input will be extremely appreciated and valued.
Thank you.
Nela Riehl
Yes. Thank you very much. Thank you very much for the extremely detailed and interesting discussion. We've taken away a lot of information and knowledge, and are looking forward to continuing this dialogue. And thank you very much for being with us today.
Thank you.
Nela Riehl
So we will start with the high, with this next part of the session. And I ask everybody to either take the floor or leave the room, but please do not chat in this room. Yes, I was also like. And our experts are here, so I'm gonna switch into German, and we will start with the next session. And again, please, everybody, it's very loud in here.
Nela Riehl
Okay, done. Right. I'm going to switch back into German. Dear colleagues, the next item on the agenda is the workshop from script to screen, the European film financing landscape. Today's discussion takes place at an important moment for the European film sector, one that is marked by rapid technological change, evolving audience habits, and increasing competition in a globalized audiovisual market.
Sorry, against this backdrop, the objective of the workshop is to take a look at how the European film financing ecosystem works. Beyond mapping the present and exploring how films can find their audiences also across borders, this workshop is going to look ahead, to try and identify future trends, policy gaps, and opportunities. To explore these topics, we are joined today by three experts who will share their perspectives. So first, let me welcome Martin Kanzler, Deputy Head of the Department for Market Information at the European Audiovisual Observatory. He will provide an overview of the ecosystem for film production and financing in Europe.
And Mr. Kantzler is joining us remotely from Strasbourg. Secondly, a warm welcome to Ms. Catherine Bengeser, Associate Professor at the Department of Media and Journalism Studies at Aarhus University in Denmark. Ms.
Bengeser will provide an overview of the challenges faced by films from smaller member states and countries with lower audiovisual capacity. And she will be showcasing examples of successful strategies and measures for promoting them. And thirdly, I would like to greet Mr. Tim Rats, Associate Professor at the Communication Sciences Department of the Free University of Brussels, the VUB. Mr.
Rats will present the key challenges and opportunities facing the European film sector, including the impact of artificial intelligence, and also explore how they could be addressed. Following the presentations, we will have a first round of questions and answers. The discussion will then, if time allows, continue with a short catch-the-eye session, and this will be followed by brief interventions from the SIPREP presidency and the European Commission. I'm looking forward to this discussion and to hearing the insights our speakers will bring today. So let us begin with the first presentation, Mr.
Martin Kanzler
Chancelier. You have the floor for 12 minutes. Go ahead, sir.
Good morning, everyone. It's an honor to contribute to your reflections on the financing of European films. And I will do so by next slide, please, by first highlighting the main characteristics of the European film production ecosystem to give you the context within which European films need to be financed. And then I'll show you exactly how European theatrical films are currently being financed. By the way, when I refer to Europe, I'm referring to the wider Europe, the member states of the Council of Europe.
And I will only be addressing theatrical films, as the financing of a division works is a whole different story and would go beyond the twelve minutes. Next slide, please. What is important to keep in mind is that I'm going to give you a big picture point of view that applies to the majority of European films, but the situation can be very different from one film to the next, and from one country to the next. That is just important to keep in mind. Next slide, please.
I think it is fair to say that the main characteristic of the European film sector is that it is its diversity and fragmentation. Meaning, there is a large number of small and a small number of large. And that applies to basically all the main parameters, starting, and this is of fundamental importance in the context of financing the market size. Next slide, please. As the revenue potential for films in any single market evidently depends on the size of that market.
And most European markets are comparatively small in terms of box office. That means the reality is that on a national level, there is simply a rather limited revenue potential for most European films. So that's the first important aspect. Next slide, please. The next characteristic is that the vast majority of European production companies are small and medium-sized enterprises who produce comparatively few films.
Unfortunately, we don't have any figures on the pan-European level, but I'll use Spain just to illustrate my point. Out of the 600 active production companies, 81% of them were only working on one film in '24. So, this low number of productions has two important aspects with regard to the financial strength of production companies. The first one is there's no possibility to hedge the high risk that is associated with any individual film, as you don't have a portfolio of the larger, like up to 10 or 20 films, where one of them can be profitable and carry the others. And the other aspect is that most of these companies will have a comparatively small back catalog, which they can use for IP exploitation over time.
So that's the second important characteristic. Next slide, please. And similarly, there is a large number of filmmakers who create comparatively few films. Now, this large pool of filmmakers is great in terms of diversity and creativity, and I think it is one of Europe's strengths. But the limited continuity in their work puts professionals in the sector at a high financial risk.
Next slide, please. So we have a lot of production companies, a lot of filmmakers, and they are creating and producing lots of films. Every year in Europe, more than 2,500 theatrical films get released. Now most of these films, 85%, are produced with a budget of less than €3,000,000. That is a lot of money in absolute terms, but it is comparatively low when compared with the international productions that the European films are competing within the box office and on streaming.
Another important thing to keep in mind is that most of these films are actually 100% national films, meaning they are entirely financed within one country, their country of origin. 2,000 out of 2,500 fall into that category. And only 500 films are co-produced internationally. And these co-productions are, of course, very important for the smaller markets and for those films with higher production budgets, which cannot be financed on a national level. What is also, and it's closely linked to this, is important to keep in mind that most European films seem to cater primarily to the national audiences.
About 70% of these films sell more than 90% of their tickets in the national markets. And only one in 10 films sells more than 50% of its admissions outside of the national markets. That is 250 films, quite a large number in absolute terms, but when you compare it to the total production volume, it's only 10. This, of course, is not a problem per se, I think. I think it's part of the role of films to exactly cater to national audiences with national stories.
And then there is another type of film that targets international audiences in a wider distribution. And for these films that travel, they will often be co-produced. They will have larger budgets, tell stories that are appealing to cross cultural across borders, to audiences across borders. And for these films, I think Creative Europe media support is really essential when it comes to the development and the distribution part, and or image support when it comes to the production. So when reflecting on film financing, film policy from a pan-European level, I think it's useful to see the value of both.
The large number of national films catering to national audiences, and a more selective number of films targeting international audiences. Next slide, please. Now when you combine the fact that most European films are targeting primarily national audiences, and those national audiences are small, and films are comparatively expensive in absolute terms, it's not surprising that most European films will not manage to recoup their costs, at least not in cinemas. Based on very rough guesswork, we estimate that more than 90% of European films do not do so. And while we don't have any figures on the revenues from streaming and TV exploitation, it's our understanding that theatrical exploitation still remains the main revenue source.
So it won't move the needle too much if we include the entire value chain. Next slide. Now combining the fact that most European films will struggle to break even, and that most production companies are small and don't have a strong equity base. And the fact that financing is generally accessed on a project basis rather than on a company basis. It is logical that the dominant business model in the European production sector is a production-driven business model.
What do I mean by that? Next slide, please. I mean, it's a production company that develops the project, assembles the financing, produces the film, and earns their living from the producer's fee and covering the overheads, and then repeats the process rather than trying to maximize the exploitation revenues. In this model, the economic viability of a film production is determined basically at the financing stage. So financing is key.
Next slide, please. So let's have a look at how exactly European films are being financed today. Next slide. In collaboration with national film agencies, we have been collecting over several years now detailed financing plan data for European live action fiction films, and we have a really good understanding of how they are financed. And the data are very clear.
There are five financing sources that are all essential. The first one is automatic and selective direct public funding. Second one, production incentives. And then broadcast investments, producer-owned investments, and presales. But among these five sources, next slide, please, public support clearly stands out.
Cumulatively, direct public funding and production incentives cover almost 50% of the total production cost of European fiction films. When we take into account, furthermore, the broadcast investments that come from the public service broadcasters, which account for the majority share of the broadcast investments, the share of public film financing actually increases to over 60%. While public financing stands out, I'd like to stress that the other elements, the presales and producer investments, are also absolutely essential. Without them, it wouldn't work either. Next slide, please.
And what the data also clearly illustrate is the fundamental importance of the size of the national market in determining how films are financed. You can clearly see that it's only in the largest European markets, the big five, where you have a fairly balanced, financing mix between market and public sources. Whereas the small markets, but also the medium markets, do not have the potential to raise enough market financing, and heavily depend on public financing of films. Next slide, please. And when you look at the development of the financing structures over time, you can observe three important things.
The first one is that overall, the financing structures of theatrical films have remained remarkably stable despite the market changing completely. And notably, the streamers who have conquered so much of the market share do not play any significant role in financing European theatrical films. There are only two things that have changed. One is the importance of incentive funding has almost doubled from 10 to 20%, and the share of broadcaster financing, on the other hand, has decreased clearly. So overall, the financing of European films has become more dependent on public support over the years.
And to wrap up, next slide please. I would say when discussing film financing and film policy, it's useful to keep in mind that many films are meant to tell national stories to national audiences. These national markets are small, have limited revenue potential, and necessitate a production-driven business model where financing is key, and the financing relies heavily on public money. But so the diversity that we see in the large number of companies, filmmakers, and films, I think is a direct result of public policy pursuing cultural diversity as one of its main goals. And, the difficult question now going forward is how to balance the goals of this cultural diversity and the strengthening of the economic sustainability of the sector at the same time, and finding the most efficient tools how to do so in a fast-changing market environment.
But this is up to you to discuss, I guess, and I will be happy to answer any questions regarding my presentation later on. Thank you very much.
Nela Riehl
Yes. Thank you very much, Mr. Counselor, for your presentation. Before we move on to the next presentation, I'd like to welcome the visitors group. So welcome to the committee.
And without further ado, I'd like to hand the floor to Mrs. Benges. You also have 12 minutes.
Catherine Bengeser
Thank you very much, and thank you to Martin Kansler for the excellent introduction to the film funding structure in Europe. In my presentation, I'm going to focus on the small markets and particularly on their differences in the way they perform within this challenging context, and also the differences in which they deal and can deal with these challenges. The evidence that I'm presenting to you emerges from the Horizon Europe funded research project, Crescine, where we have looked specifically at small markets, and we define small as those countries or markets with 1,000,000 to 16,000,000 inhabitants. You will see highlighted the seven markets that we focused on primarily, but the broader trends that I'm aiming to showcase to you today apply to small markets across Europe. And you will also see that our sample included countries that are classed as high-capacity countries in audiovisual production, as well as those classified as low capacity.
I will get to the distinction between those in a minute. So following Martin's presentation, you have heard that small European markets mostly focus on their domestic audience. But the challenge for small markets is that the commercial revenue that can be achieved in the domestic market is not enough to sustain a film industry. So, therefore, they have to supplement their income with additional sources. And you have heard that public funding is a key and crucial source of such support.
But public funding, as you well know, comes with its own success criteria and policy goals. So one of these criteria can be a broad domestic reach. This is, for example, an explicit part of the Danish film policy. Another goal could be artistic excellence, which is, for example, part of the Portuguese film policy. Beyond these criteria, there is also income to be found abroad, and this can be accessed through export as well as through incoming investment.
For example, when a country aims to attract productions from abroad, Croatia was an example of this, and it's regularly the location where big U. S. Productions like Game of Thrones or Succession are filmed. I'm aware that those are television series. Now the challenge here is that all these avenues are not necessarily compatible.
The success criteria across these avenues are not compatible. And it is hard for small markets because of their limited resources and the smaller scope of productions to address all of these success criteria with a limited pool of films. I'll give you an example of that. Ireland, in our sample, was the most well-exporting market, yes, for film. But it was, at the same time, also one of the markets with the lowest share of domestic film in the domestic box office.
Of course, Ireland then additionally has the challenge of being a small neighbor to a large same language exporting market, the UK. And you have already heard from Martin that the films that speak to domestic audiences are not necessarily the films that speak to international audiences. And it is hard to achieve both with just one film. However, we do have examples of films that have achieved the nearly impossible. And looking at those can give us an insight into how to navigate this landscape.
Before we get to that, I also wanted to highlight that the countries that we're speaking about, of course, also have very different conditions that they are dealing with. For example, infrastructural conditions. I brought you an example, the example of Lithuania. What you see here is a map of cinemas in Lithuania versus cinemas in Denmark. And you will see that the cinemas, particularly those with several screens, are the more red-colored dots are concentrated in the large cities, whereas smaller cities and rural communities in Lithuania are mainly served by cultural centers.
Those are important for making film accessible, but they are not able to reach large scale like proper cinemas, which, when we compare it to Denmark, we find across communities of the same size. For example, communities with under 10,000 inhabitants are in Denmark served by proper cinemas. In Lithuania, they are not. So that means that those infrastructural conditions can limit a country's capacity to exploit the domestic market efficiently. So now to the films that have beaten the odds. My first example comes from Denmark.
It is the film Another Round, and I've selected it because it's one of the very few films from small markets that has managed to be extremely successful at home and abroad. I don't know if you've seen the film. It is a dramedy about a group of middle-aged friends experimenting how life would be if you were always slightly drunk. This film has resonated with domestic audiences because it is a loving satire of Danish society, but at the same time, it has resonated with international audiences because it stars Mads Mikkelsen, and it has achieved incredible attention also in the festival sphere. It was screened in the special selection at Cannes.
It won European Film Awards, and crucially, it won the Oscar for Best International Picture. That should also underline to you how difficult it is to achieve that success. The film has been supported by Creative Europe through distribution support. And thereby, Creative Europe has supported Denmark in exporting. And Denmark, as you've just heard, is a market that nationally focuses more on the domestic audience.
So here, we have the European funding supporting the export. My second example comes from Lithuania. It is the post-apocalyptic sci-fi drama Vespa, and it is the only sci-fi film from Lithuania to date. You have heard from Martin that it is impossible, very hard, for small markets to fund to achieve the budgets for expensive genres like sci-fi. And here, coproduction, particularly with large markets, is crucial.
This is an example of this. This film was one of the films that achieved most of its admissions abroad. Again, you've heard from Martin that this is very rare. And it is still among the most well-circulating films on video on demand in our sample. It has been supported again by Creative Europe through development support, and the producers have underlined that this support very early on in production was important to attract the international and renowned talent that later carried the film.
The film was also achieving success at home, but when we spoke with audiences in Lithuania, they also remarked that it was very easy to miss this film in the cinema, and there may be a connection to the way the Lithuanian cinema infrastructure works and how many opportunities you have to see a film, particularly if you're not in the large cities. The other element that makes this film special is that it's a film that is led by a low audiovisual capacity country, which leads me, yes, to my analysis of how Creative Europe supports these countries. Creative Europe is a media program specifically charged with taking into account the differences in production, distribution, and audience reach among the countries. And a key tool for this is the distinction of capacity. High audiovisual capacity countries are marked in blue here, and you will see that there are also small markets among them.
Denmark and Belgium are examples of this. And then in the yellow and orange colors, you will see the countries currently classed as low-capacity countries. They receive the possibility for special support. They have a development support scheme that is targeted specifically at those low-capacity markets. And in some of the media content cluster instruments, they can score extra points in the evaluation.
Now the midterm evaluation of Creative Europe has shown that the participation of low-capacity countries in the program has increased. For example, when we look at co-productions, we went from 5% of Creative Europe supported co-productions to 30% involving low capacity countries. But still, capacity countries receive a lower share of Creative Europe funding per capita. And there is also a tendency that countries with higher national support and national public funding receive more Creative Europe support. So to go to my recommendations, particularly because small markets are focused on reaching their domestic market, Creative Europe's role is mainly in supporting the international distribution and supporting to achieve the success goals of export.
Maintaining or potentially expanding the low-capacity measures promises to increase the participation of low-capacity countries. And here, coproduction is really a key tool because it enables low-capacity countries to reach those budgets and these types of films that they cannot do on their own. And it is important to work on films that are led by low-capacity countries because that also means that there will be more spend and also more on-screen recognizability of the countries. You have heard from Martin that the cinematic window, the theatrical window, is still key for European film. And there is a correlation between theatrical performance and VOD performance.
So support for the theatrical window is also support for successful exploration of VOD. But when we come to VOD, and this is my last point, we have to bear in mind that low capacity countries, because they are smaller and have fewer films to go around, and because they are often not well integrated into the global trade of audiovisual rights, can benefit less from, for example, the AVMSD quota. It could be the key to ensure a potential revision of the Audio Vision Media Services Directive that investment obligations also encourage particularly transnational VOD players to carry film outside of the Member State that produced it. And lastly, when we spoke with audiences, we found that the process they go through for selecting a film is very complex. And one part of this is addressed by the AVMS, the prominence of film on the interfaces.
But prominence does not equal discoverability. People need to also have background knowledge and be introduced to the films and the countries they come from, to actually be interested and willing to take the risk of watching a small market film. So to sum up, the goal here is to make small market films less risky for funders, producers, and audiences at home and abroad. Thank you.
Nela Riehl
For that presentation too. And now we come to Mister Rats for twelve minutes.
Tim Raats
Okay. Thank you very much for this opportunity to speak for you today. My presentation builds on the two previous presentation. I base my arguments and insights on ongoing research, desk research, and including expert interviews, analysis of film financing. What I could do when being asked to focus on the future of film financing is discuss shifts in formats, media use, emergence of XR, immersive content, and micro content, which are all likely to have an impact on the future of film.
Speaker 30
But I feel that to really understand the future of film financing, I need to address some of the core issues occurring today, which will have a detrimental impact on the future of film financing. So if we want to secure the future of film financing, you need to create the right conditions. It has already been mentioned, for players to take creative risk, and creative risk is associated with financial risk. Both are intertwined. You need the creative risk to make a valuable product that could in turn become a financial success, and you need the right financial circumstances to also take sufficient creative risk. And it has already been mentioned, but film financing in Europe is a very risky business.
Speaker 29
Every film needs to prove itself and is characterized by huge uncertainty of demand no matter how famous the movie stars are you put into it, no matter how recognizable the genre is. Secondly, it is highly dependent on scale. The size of the market defines how much potential recoupment you have, and thus, how much risk you could take. So the fragmentation of European markets and the lack of scale makes this financing extremely risky and hence the dependence on public support, hence, the fact that financing is made up as a composition of different kinds of little pieces of the puzzle, and hence, the fact that private investment in European film is relatively limited. Now what we are witnessing in the last decade, the last five years, and especially in the last two years, more abruptly, is an increasing pressure on the different parts of this value chain that creates the conditions for financial and creative risk taking.
Speaker 30
What we have seen is that broadcasters have their investment in film reduced. They're facing significant challenges to compete with streamers to reach audiences, they're forced to become platforms themselves. Distributors, especially independent distributors, must spread their limited investments over more titles, and they are struggling financially and take less participations in the movie financing because theatrical success is also less certain. Streamers in the meantime have become an important part of the audiovisual ecosystem, but much more for television series and series in general, and particularly fiction series, not documentary series. But looking at the financing of film, what streamers give for a title does not compensate the cost of a film.
Even if you have the worldwide territory, then still what streamers are willing to give is relatively little in comparison to the actual cost. And while catalogs are filled with films, there are many more films in the Amazon catalog than there are series, for example. Series benefit from more viewing times and investment obligations that exist since 2018 in the AVMS directive. They also benefit series more than films. This also ended the prominence of European works that Catherine was also referring to, also benefits series more than films. Now faced with increased competition, these streamers are also shifting from growth to profitability.
This is a development, as we have seen in the last two to three years. And this has led to more careful commissioning, reduced commissioning, taking less risk, spreading investment over more genres, for example, reality, sports, video games, even. And streamers are also increasingly competing with video-sharing platforms. For a lot of broadcasters and even for players like Netflix, the biggest challenger now is YouTube, which has grown in importance, and players like YouTube are already dwarfing a lot of the streamers in terms of income. So streamers are captured by investment obligations.
VSPs at this point are not, and they might give chances for content creators to generate a lot of money, also European content creators. The income is not or rarely reinvested in European original content. And all these developments, they also take place within a context of increasing production costs. Inflation has pushed wages, salaries up significantly. Indirect costs, think about studios, energy, transport, insurances, catering, everything has gone up because of the increasing cost of life.
And on top of that, film funds grants have not increased in correspondence with these rising inflation costs. A second point I want to stress is that if the screen would follow me. Yes. A second point I want to stress is that if we want to ensure financial risk-taking, we need to make sure that our focus stays on the demand for film as much as it does on the offer of film. So, yes, streamers have challenged cinemas and theatrical considerably.
Yes, there is pressure on release windows. Release windows are shortened. And, cinema attendance figures are very dependent on some key success titles. Think about Barbenheimer, Barbie and Oppenheimer two years ago, which really boosted cinema attendance. Yet, theatrical exhibition is still the core form of recoupment for filmmakers.
And what COVID crisis has shown is that not only film industries were relatively resilient, but also cinemas, have been forced to close, had been very resilient to this disruption. Now what the crisis and the years after, and the energy crisis and so on, has shown as well is that for many European cinemas, attracting audiences is not the key problem. The main problem is rising operation costs, rent, personnel, energy, substantial investments they need to make to make rooms wheelchair accessible, projection systems, and so on, energy efficiency, and so on. So on top of that, what is always said is the future of cinema, the future of theatrical is in experience, and for the ways to build successful experiences. For the big multiplexes, experience means investment in screen, technology, sound, 3D, 4D, IMAX, and so on.
But for smaller independent art houses, for example, or independent profit cinemas, it is in creating the right experience, the right conditions, events to visit a film. And even there, we see that all these costs have increased as well, and that it becomes very burdensome for people to take extra initiatives to create this experience. And thirdly, and unsurprisingly, I think, artificial intelligence is, of course, emerging as a structural game changer across the entire audiovisual industry. With significant implications for how films are developed, produced, and financed, it has already been raised in the previous session as well. AI has the potential to reduce cost, to enhance efficiency.
For example, think about making contracts, editing, subsidy grants, curation strategies, programming algorithms for interfaces on streaming catalogs, and so on and so on. But it also, and more importantly, raises justified concern over job displacement, a lack of transparency in AI systems, risk of originality and authorship. So at this point, there is no specific legislative framework that covers the entirety of a film production because of the diversity of its uses, but there's also no licensing system. There's no transparency in what copyrighted material is used, let alone who gets compensated and how much copyright is infringed, or what could be fair redistribution and compensation for authors. So and lastly, there's also a significant potential for AI in distribution, production, planning, and so on, but there is a real lack of training at this point to pick up the speed and roll these AI programs out.
So looking ahead, we're likely to evolve into a situation with increasing pressure on film financing. If creative choices are defined by financial uncertainty and short-term decision making, this is inevitably leading to a reduction of creativity and authenticity. The dominance of VSPs will further put pressure on streamers, and it's likely that existing power asymmetries that exist today between small players and large streamers and large video-sharing platforms will, at best, remain, at worst, become even larger. There's also the increasing need to produce and protect European a p IP, but at the same time, the IP is increasingly becoming under pressure because of AI, because of the control of rights that streamers have when they make deals. As a result, players will also be forced to build scale, but the problem is that territorial differences in Europe also limit scale building.
So who will build scale? The players that are not dependent on territorial differences, which means, large and larger, broadcasting conglomerates, streaming conglomerates, and much less the production conglomerates. So this puts pressure on independent production. And then lastly, there's uncertainty about replacement of position and AI fitness to stay ahead of these developments. Now looking at policy choices then, I'm very aware that every policy choice also requires a lot of conditions to take into account and factors to take into account, so please, consider my recommendations as a starting point for further reflection.
I think for AVMSD, it's crucial to find ways to harmonize investment obligations across Europe, to ensure the predictability, to create a transparent framework, also to avoid court cases as streamers are increasingly going to court to question some of these investment obligations. Given the importance of IP for producers and especially independent producers, it would be wise to introduce minimum criteria for rights retention as part of investment obligations in Europe or as part of quota arrangements. It's also important to explore ways in which the 30% quota could also reflect a variety of genres, including documentary and feature film, and a variety of EU markets, including the smaller states, which is similar to the point that Catherine has made. And lastly, it's worth exploring the legal feasibility of extending investment obligations to all actors in the value chain and captured by AVMSD, which includes video sharing platforms as well, and let them make a contribution to European works. Secondly, the media program has played a crucial role in the distribution and exhibition of European works.
This cannot be stressed enough. It also had an important cascade effect. It really triggered national film funds to also develop audience development training, ecological measures, distribution, promotion, and so on. Now these national funds at this point are under increasing financial pressure. And what we see is that when you're under increasing financial pressure as an audio visual fund, you tend to focus on production and subsidies as your core task.
So it's imperative that the Agora EU puts distribution, promotion, and audience development central in its program. It's also important, I think, that film is given priority consideration given its higher fragility. Now support measures should also invite to build scale and collaboration while taking into account the diverse needs of film industry players and member states. Grants should also reflect the increasing costs of activities. In the years to come, more money will be required to keep doing the same things.
It should be important that industry actors benefiting from grants are not pressured in the sense that they feel that they need to do even more to be able to get subsidies. And lastly, strengthening copyright protection in light of AI will be essential to ensure that innovation in film financing and production does not come at the expense of content rights and Europeans' cultural diversity. So this includes, I think, the protection of copyrighted material that is used for AI models, encouraging the development of licensing models, arranging fair and transparent remuneration. And I think here, we need an approach that supports experimentation, and identifies areas where AI can strengthen European film financing and European filmmakers while at the same time closely monitoring the impact on employment, authenticity, and ownership. And this concludes my presentation.
I'd be happy to respond to any questions. Many thanks for your attention.
Thank.
Nela Riehl
Thank you so much for that presentation. And now that brings us to the catch the eye. We start with the coordinators, and starting with the EPP, Mr. Stoyevsky. You have the floor.
Bogdan Andrzej Zdrojewski
I'd like to start off by thanking all of you for extremely interesting presentations, especially when it comes to both the financing and the legal aspects. This was a broad range of information. A couple of questions. Is it going to be possible to build up or create a program to support stable film-producing centers? Because these do face problems over the past few years in the European Union.
And there is one center in Berlin, which a couple of years ago faced closure. Cinecitta, for example, there are a number of places which are very well known, but they are going through a crisis, especially when it comes to their possibilities for creation. Babelsberg, for example, in Berlin, there was an issue stemming from the strike in Hollywood, so that was out of their control. And then sometimes, we do have disputes, and there is a block to funding for European films. There were over a thousand films, this going back to the 60s and 70s.
These were either deemed to be orphan works, or there were disputes relating to intellectual property and copyright. So these issues have been going on for a long time. Has any progress been made to sort out these issues relating to orphan works? Because, obviously, there were then problems relating to distribution. And what about some kind of uniform taxation in Europe?
We know that in Europe, there are certain member states that have coproduction agreements. And the basic VAT rules, then, we know are very different from one member state to another. Would it be possible, do you think there could be a recommendation to have a uniform single tax rate so that it would be easier to have coproduction and they wouldn't come up against these tax issues? Thank.
Hannes Heide
thank you very much. And now, Hannah Seide, thank you very much for this very thorough and professional presentation, which showed what the opportunities are and what the potential is, but also what is needed. And Creative Europe was, in fact, mentioned several times. The way that is organized as it stands, it's a very important, indispensable contribution to European films. And we are talking now about the new MFF.
And in that, in medium plus, there's no division between audiovisual and information. On the other hand, there's an independent film section, which is no longer explicitly mentioned. What's also important, however, is, and we know that with regard to TV stations such as Arte, for example, these have had a huge number of independent productions. And so my question is, apart from the various necessities that we were talking about here in this committee, what would the recommendations be that you would give us for the new MFF? With regard to AI, that was also mentioned.
And the previous speaker also spoke about studies, which are at risk. We also have an own initiative report with regard to AI on the creative sector. So, what is needed? Do you what do you see is needed with regard to AI? What are the structures and the investments that are needed to help the European film sector to be more competitive?
With regard to funding, this is a major subject, and we didn't look at the whole question of precarious working conditions and pay. So, what are the needs there? Also interesting for me with regard to best practices from various member states, where there are specific needs for investment, would you have recommendations with regard to how that could be improved? And then at the very end, a subject that's very passionate about the whole question of cinema. I was very surprised to see that in Denmark, they have lots of individual cinemas.
And I think that's very important because this is an area of communication. And, also with regard to rentals, that's important for European films. Where can these films be played? And it is, or at least it was, the case that major successes in the movie world, there's a specific time during which they have to be shown in cinemas, and they can't be rented out individually to private pieces. And so I think that, in my opinion, this question of rentals is also an area where we need to work.
And then my last question is a question with regard to details. In, with regard to Lithuania, we saw that in Lithuania, it was in dark green, and that was about. I would like to know what is the question with regard to other categories in Lithuania.
Nela Riehl
Thank you very much. And so I nobody for the PFE, and I also see nobody for the ECR. Renew is not here either. And so that brings us to the Greens, and that's Diana. Yes.
Speaker 31
Thank you very much. First of all, I would like to thank all of you for being here for this hearing, and thank you for the information that you have provided us. I'm not going to repeat some of the questions that my colleagues have said. Obviously, we're very immersed now in the whole audiovisual sector, not only given the situation in the European Parliament, where, obviously, we're negotiating the new multi-annual financial framework. And, we do have this new structure, Agora EU.
Five to ten years ago, the audiovisual sector and the world of cinema and film had changed a lot. And there are many challenges that we are facing now. We have to come up with the solutions to these problems not only for the good of the industry that we're trying to defend and support, but also the cultural sector in general in the European Union. Now we have been working together a lot on this. I'm going to address an aspect, the aspect of multicultural culturality, but multilingualism.
Through your presentations, you didn't seem to feel that the linguistic aspect was one that should be assessed. So I would be interested in hearing from you on the language aspect, linguistic aspect, because you've been talking about large markets and small markets in the European Union. And how are these large and small markets linked up to the linguistic aspect, not in terms of how many people speak a given language or how many, but how many subtitled films can be distributed in these different languages? When we talk about language, the linguistic aspects, we feel that this is an issue that's been solved given the new technologies and the way that you can actually see, watch cinema and films or read literature. But obviously, there is the impact of one major language across the European Union. I.
English, and we don't seem to be focusing enough on the aspect of multilingualism and how this is being dealt with in Europe because obviously we want to establish and strengthen links between the different parts of the European Union. And to do that, we have to see how we can disseminate, allow these different languages to be more mobile, as it were. So how have you dealt with a linguistic issue? And how can this be incorporated? And how can we get more data and information, because obviously, we within the EP would need to have this information.
Nela Riehl
Don't see the left or the easier. So that brings us now to the catch-eye.
Speaker 33
I also would like to thank you very much for the challenges, for describing the challenges associated with the production and distribution of films in Europe, and you made very clear that financing is a very complex matter and usually comes from numerous and diverse sources and, of course, faces many challenges. I would be very interested to know what role European cross-border cooperation plays here, not only for theatrical films. So, can you explain more? Where do they make sense, and to what extent are they even necessary to secure the required budgets? Are there synergy effects, maybe resulting from collaboration of this kind?
Speaker 34
And if, what are they? Maybe they're even more cost-saving through these synergies that make the additional coordination effort worthwhile, or does this make financing even more complex? So, is it easier or more complex? And finally, what are the biggest challenges in Europe collaborations that might contribute to even greater complexity, and how can we solve them? Thank you very much.
Ruttolov for the s and d.
Mister Ruttolov for the s and d.
Résidente.
Speaker 35
Thank you, chair. Recently in Italy, there was a documentary about Giulio Regeni, and it turned into a political case, which was quite emblematic. We're talking about an Italian student who was tortured and killed in Cairo by the Egyptian state authorities, and the truth has still not fully emerged today. And an independent documentary, which reconstructed this whole event, was one of the first to be excluded from the competition for public funds, not because of a lack of public interest, but because of a point system established by a committee established by the government. And when two members of that committee resigned saying that there was inconsistency, obviously, we're faced not with an administrative procedure, we're faced with a problem of credibility.
Speaker 37
So let's be clear. When public funds are the main way of accessing culture, and mister Council referred to 60% of finance from public sources, then the borderline between technical assessment and political assessment is very vague, and there could be indirect censorship. So we have to ask ourselves, what should it be? What stories should be told? Now we don't just want committees appointed by the political authorities.
Speaker 35
We need a joint system where universities, independent institutions, and international organizations would have a real role to play in selection. Transparency, not just scores and points. There are other criteria for exclusion. We could have a type of double blind system, at least in the initial phases, to avoid a certain political orientation in infiltrating and influencing the choice. And this is where the EU would intervene.
Another question is, what about the tools we have available today? Are they sufficient to ensure independence and pluralism in the area of culture as well? Or has the time come to strengthen them by making the protection of artistic freedom more explicit by, for instance, having a chapter in the yearly report on the rule of law. There could be a chapter on culture. The Regeni case doesn't just concern Italy.
It concerns us all. It's the relationship between truth, power, and culture, and we have to decide on which side we want to be. Do we accept a system where difficult works have more problems being accepted, or are we going to protect pluralism? Thank you.
Thank you.
Nela Riehl
Very much, Mister Rotolo. And now I'd like to hand the floor back to our experts. I would say approximately 5 minutes each, and we'll do it in the same order as we did at the beginning. So we'll start with Mister Kanslov.
Martin Kanzler
Because as you know, the European Audiovisual Observatory is quite a specific institution in the sense that our role is exclusively to provide factual data to inform stakeholder dialogue. We are not in a position to comment on policies or to make recommendations for them. And most of the questions that I noted down were going in that direction. So this is something that I cannot address. The two points I noted where I can say something about was the language issue and the role of cross border co productions.
In terms of data, it's very difficult to include the language information in our statistics as we do not know in which language the films are being screened in cinemas. But what I can say is that I think language plays a crucial role when connecting with the national audiences. Coming from Austria, now this is a personal anecdote, there's a huge difference whether I'm watching an Austrian film or whether I'm watching a German film. And it really connects to me on a different level. So I think connecting at this level, the language is absolutely crucial.
Looking at the circulation point of view, our data suggests that clearly English films with in English language travel significantly better than films in, with the local languages other than English. And it's also we don't have the data, but there has been, I think, consistent research that audiences do not like to watch subtitles. So they at least the majority of audiences. So they prefer films to be dubbed, which has been very expensive in the past. But I think with the AI solutions, this will be quite easy in the future.
I'm not commenting on the quality and the feeling you get out of an AI dubbing, but at least on a formalistic level that will be possible. So will I think be standard practice soon. As for the co-productions, I think they are important on three levels. The first one is, of course, the financing aspect. That is, for films that are ambitious in terms of the story they want to tell and the budget, the production value they want to have.
Co productions are often the only way to finance these higher budgets. So budgets are generally more expensive, higher for co-productions than for national films, and the financing is more complex. It does not make it easier. On the contrary, dealing with national different funding criteria with different cultures, with different rights makes co productions significantly more complex than 100% national films. So you need to have a good reason to co-produce.
And, one good reason is to tell a story that actually goes beyond the national interest, and co-productions help films to circulate much better than 100% national films. That's a fact. So if you're targeting international audiences with the story that is addressing audiences on a cross-border level, then co-productions are the right tool to use. And those were the two points I could address, and I see I actually used up my five minutes almost. So I'll hand the floor back at this stage.
Yes, that's fair. That's perfect.
Catherine Bengeser
Sorry, I was getting carried away. I can speak English. Thank you very much for the diverse questions. I will start with the details on the small screening venues. So what you saw for the cinemas in Lithuania were so-called cultural centers that screen films every now and again, but they are not classified as cinemas because they don't necessarily have a regular programming.
Those one-screen cinemas that you saw in Denmark are often community-run, not-for-profit cinemas. So here, Denmark, which is also a country with high levels of public funding and civil engagement, has managed to create an infrastructure that is supporting itself. And actually, we found evidence that domestic films are performing even better in those smaller communities, to address your exploitation rights question. But of course, these have the rights question has to do with what distributors, the terms and conditions that distributors put on cinemas. So for example, for Disney movies, there is a certain agreement on how often they have to be screened.
So the cinemas, if they want this film, can't do anything about it. In terms of our recommendations, I think you have seen clearly also from Martin's presentation that European markets and film producers have this project-to-project logic and benefit to a lesser degree from the long tail and the larger scale exploitation of rights, which can be in different windows, television and VOD, but which can also be in export. And here, there is, of course, the distribution support that is being given by Creative Europe, which is important for incentivizing that this way of recouping money that can be used for new projects is built up. But then there is also the necessity to create professional networks, establish the contacts that can lead to sales. So it's about forging pathways that can be of business that can then be exploited in the future.
And that would also be my answer to the co-production question. You were asking about synergies. I think from my perspective, the core benefit of a coproduction is the professional benefit that you have the possibility to work together with different styles of developing projects, for example, but also pathways for future co-productions become easier and easier. So it is not surprising that Creative Europe supports co or the co-production supported by Creative Europe are often within established co-production constellations. So, for example, the Nordic countries have a co-production system among public service broadcasters that has been running for decades.
So it's within that industry normal to call partners in those different countries. The same goes for television coproduction between the Nordics and Germany, for example. It's easy to pick up the phone and keep working on this relationship. So in order to benefit more from coproduction as a pathway to capacity building and to export, because we know that coproduction exports a lot better than purely nationally funded projects, it would be, I see Creative Europe's role in forging those paths and making them easier to go on, and also creating new constellations that are, yes, that can be exploited in the future. On the issue of multilingualism, I wanted to stress that this is not just a question of dubbing or subtitling, but it's also a question of broader knowledge and access to information about the films from our many different small countries.
We did qualitative audience research across Europe and showed audiences promotional material from the films of small markets. And there simply is a greater threshold to cross. Audiences are thrown when they suddenly hear, for example, Gaelic. And first, sorry, and need a second to adjust, like where is this content even coming from? And then this threshold does not need to be crossed if it's in a more popular language, of course.
But this doesn't mean that audiences won't watch those films when they are given the opportunity to find out more about where these films come from and find suitable information. But that is not always easily accessible because the films from countries that don't have a huge export track record are usually not covered, for example, in cultural sections of newspapers, but also the information that is found on platforms like IMDb is not necessarily up to the standard to actually help audiences take that risk of going for that small market film. Thank.
Tim Raats
Thank you very much for these interesting and highly relevant questions, I think. On the question of copyright, I'm not sure if I can answer the orphan works because I'm not a specialist in that. What I can reply to is the questions related to the tax incentives. There was a question on the importance of these hubs, production hubs and production centers, and like Babelsberg was mentioned, I think these have been extremely successful decades ago when a lot of countries, member states did not have their own tax incentives. We see now that production hubs are created around the availability of tax incentives.
Speaker 30
Game of Thrones meant a very important boost for Croatia at some point, for Ireland and Northern England at some point. But once the production was gone, also the hub was gone. So this is an enormous fragility and precarity that you create if you, as policymakers, also invest enormous amounts in these hubs. As for a uniform taxation, I think that, my gut feeling would say that would be the most beneficial system to choose from. But the problem is that at this point, different tax incentives and differences between tax incentives also sometimes give more strength or more power to smaller member states to mean something important in audiovisual ecosystem.
So then the next question would be how much would be a good amount for a common tax incentive that would work for the whole of Europe? And that would be, I think, very difficult to negotiate with larger member states. I come from a country from Belgium, which has an enormously successful tax shelter system that really boosted production. But we also see that indeed a lot of Central and Eastern European markets, which have, and Austria, for example, which also have very interesting tax incentive measures, are now also competing with us. So I get the idea of trying to harmonize that, very much.
As for the question on protection of independent producers and the fact that this is not included in the current Agora EU plans, I think it's without going too much into detail on definitions of independent producers. I think it's very important to protect the independence of producers. Not so much the status of independence, but I think you need to give as many chances as possible to have creative control in which films you want to make, for which audience, and not be part of larger conglomerates where you are basically dictated in what you do. If an ecosystem can be created where there is no more independence for producers, but where they have full creative control, I would also be in favor of that. But reality is that this is not the case.
I think as for lessons for Ahora EU, I'm a very big fan of the Europa Cinema Network. This is a very recognizable brand. It works, and it gives chances to very large arthouse players, but also very small arthouse players in large markets and small markets. I think the fact that you have one brand under which different subsidies fall is a strong point to really cherish. And I think we need to look for opportunities to do the same in AI training, in audience development.
And rather than supporting very fragmented initiatives for audience development, a school project there, a pilot project there, it might be interesting to create scale and synergies by creating these, Europe led, brands very similar to Europa Cinema. And there was also the comments by mister Hayd on the social conditions, and it is exactly also professionalization and better protection of filmmakers and film professionals that has increased the production costs. And this is actually a good thing because they are better protected now. There are more fair play charters being negotiated. I think here, again, Ahura needs to set the standards for all others, in how it creates the conditions for filmmakers to work in, but also it also needs to be enforceable.
And this is something that I also don't know what the best solution is, because you're working mostly with producers, and I would encourage that there would be more direct lines between Ahora and directly with filmmakers, not only with producers. Same with national funders. The connection between screenwriters, directors, and film funds should be more direct. Now the main partner is always the producer, which is also understandable. As for the linguistic aspects, I think a lot has been said already, but I just wanted to add that often, the choice for English is also the choice for taking less risk.
And I think there are numerous examples, and somehow ironic that the streamers had to tell us that Casa de Papel in Spanish was extremely popular among young audiences, although it was in Spanish and not dubbed in English. The same things can be done for other languages across Europe. And what we see now, unfortunately, is that the more pressure there is on distributors, the more they're also looking for English speaking spoken content at this point. So this is really a worrisome trend, I would say. And lastly, for the cross border collaboration, I think what makes this North Vision model that Catherine spoke about so interesting, this collaboration between public broadcasters, and you also have the new eight coproduction collaboration as well, which is a bit broader than NordVision.
What makes it very interesting is that you have, like, reciprocity. You have a commitment to jointly invest in the number of titles and you're assured that investment will return. You're not being forced to set your production in 18 different countries. No. You can do it in one country or two countries, but you are assured that the financing will be there.
So I think that thinking about models where co-financing is really encouraged without actually being forced to co-produce in all these different places could also be further explored. And one genre, for example, where I do see a lot of potential for Europe and a lot of synergies is animation because it is less skeptical to language difference, territoriality, you work with dubbing and you work with subtitling. So there, I think, is an important inroad for building scale and competitiveness in Europe. Thank you.
Nela Riehl
Thank you, Schoon. Yes, thank you very much. And thank you very much to you and Mrs. Bengesse, Mr. Ratz, there's going to be a subsequent briefing.
And obviously, further information will be provided. So now moving on to the representative of the Cypriot presidency, mister Nikos Aguirides, Mertens at the permanent representation of Cyprus. It says five minutes. If you could be a little briefer, a bit, than that, please.
Nikos Aguirides
Dear madam chair, dear honorable members of the European Parliament, dear panelists, it is an honor to participate in this workshop on behalf of the Cyprus presidency of the Council of the European Union. Film is an indispensable part of European culture, building our shared identity and projecting our values and storytelling to the world. We have every reason to be proud of European cinema. Allow me first to thank the European Parliament, in particular, the policy department for citizens, gender equality, and culture for organizing this timely and insightful workshop. European Parliament is a strong and long standing supporter of European cinema in a small market like Cyprus.
Speaker 41
We always look forward to watching the Luxe Prize nominees in a timely manner, not one year later and with subtitles in all EU languages. So this is a ritual that all cinema lovers look forward to. And we are also grateful to the experts for their reach and thought-provoking contributions, which provide an important evidence base for our shared reflections. Today's discussion has clearly illustrated the complexity of the European film financing landscape, from the diversity of funding models and actors to the evolving role of audiences, and the profound transformation driven by digital technologies such as artificial intelligence. It had also underlined the structural challenges faced, in particular, by smaller member states and the directors in these members in accessing financing and ensuring the circulation and visibility of their works. From the perspective of the council and in the context of the Cyprus presidency, these reflections resonate strongly with the work currently underway across several key files.
First, with the Culture Compass for Europe, which we are about to start negotiating with the European Commission and the European Parliament this month, on the joint declaration, we aim to provide a strong political statement at the highest level, reaffirming our shared commitment to supporting cultural and creative sectors, including the audiovisual field, and ensuring that European works can continue to be created, financed and accessed across our union and beyond our union. Secondly, the discussions today are very timely as the council is speeding up the negotiations on the Agora EU program, where the presidency is working closely with the member states to ensure that the next generation of EU funding instruments effectively supports the entire value chain from creation to distribution, while taking into account the specific needs of smaller markets and emerging players. As highlighted by our experts today, ensuring sustainable financing across this value chain remains key to maintaining a diverse and competitive European audiovisual ecosystem. In this regard, culture, media, and civil society should be understood not only as policy areas, but as essential infrastructures of European democracy, contributing directly to our resilience. In an environment marked by geopolitical tensions, disinformation, and increasing pressure on independent media, supporting these sectors is a necessity.
Nikos Aguirides
Third, the existing regulatory framework, notably the Audiovisual Media Services Directive, remains a key pillar in promoting European works, including through provisions on visibility and discoverability. Honorable members, dear guests, these reflections also connect to the broader theme of guiding the Cyprus presidency, an autonomous union open to the world. In the cultural and audiovisual domain, autonomy does not imply isolation. Rather, it means ensuring that Europe has a capacity to finance, produce, distribute, and promote its own artworks in all their diversity while remaining fully engaged in global cultural exchanges. A more autonomous union is therefore one that supports its creators and industries, safeguards cultural and linguistic diversity, and ensures balanced conditions in an increasing global and digital market.
At the same time, this internal strength enables Europe to remain open, cooperative, and credible internationally, fully anchored in multilateral and shared values. In conclusion, the presidency believes that the insights shared today provide valuable input for ongoing and future policy discussions. We look forward to continuing our close cooperation with the European Parliament and the Commission in the weeks to come in advancing a coherent and forward-looking framework for Europe's cultural and audiovisual sectors. Thank you very much.
Nela Riehl
Yes. Thank you very much. I'd hand the floor to Alexander Riedel from DG Connect and the Commission.
Alexander Riedel
Dear honorable members, dear colleagues. I cannot do anything else but thank the organizers for this extremely topical workshop and fantastic presentations that we've heard today. A lot of ideas and facts, and also very relevant for our ongoing work, the commission's ongoing work that we do together with all of you, such as the implementation of Creative Europe as we know it, but also the preparation for the new program, Agora EU, but also for the ongoing review of both the AVMSD directive and the copyright rules that we will also see in the course of this year. We cannot address everything in detail, we are a bit late already. So I will just give you a little bit of quick feedback on the focus of what we discussed today, which was on the financing, the funding policy.
Speaker 44
And as we heard today, and as we all know, I mean, the EU film industry faces some significant challenges. And we, at the commission, continue to monitor the film and wider audiovisual industry very closely. I'm also in constant contact with our stakeholders to actually understand how to best respond to these challenges. We continue to publish our findings in the European media industry outlook reports. Good reading, actually.
Speaker 43
And I also noted that many of the things that were said today, there's a big match with what we have found ourselves in the latest edition of the report, which was published in September 2024. Today's presentations actually also, and we are it's music to our ears, of course, confirm the overall added value of the European funding due to its focus on the European and cross-border dimension of the film industry. And, well, this has also been published in or has been confirmed in the media evaluation that we published last December. So there, again, there's a lot of this was quoted a number of times, and there's a big match of the findings. And, for example, the promotion of cross-border circulation and audiences deserves both the objectives of not only cultural diversity, but also European competitiveness.
And, so our own evaluation of media has shown that the program was successful in promoting the cross-border circulation of work. So, media has been the catalyst that it was intended to be. Upstream, the promotion of cross-border collaborations is actually an effective tool to address some of the challenges mentioned in the presentations today. For example, the constraints of small markets get better access to audiences, finance, and being able to develop, produce, and market films with higher budgets and scale. And this is why the results of our evaluation of the media program are promising when it comes to the significant increase in the share of European co-productions among the supported works.
I mean, just to mention that 84% of what we support under our program has been co-productions, which is much, much higher than what is supported under other funding programs. And, so we believe, actually, and we've heard a number of very relevant examples that with the right funding and policy environment at European and national level, and if also, of course, companies are important businesses, pursue the right strategies, that also smaller countries do not necessarily need to be low capacity countries. So there are some joint, you know, common points, commonalities, and so on, but it's not the same thing. And, as also some of the examples mentioned today, such as Denmark, for example, show that, you know, certain things can be done. And at the same time, if the conditions are not right, even countries with a larger market size can struggle to make the most of the European and international opportunities.
So at the European level, it is therefore important that all countries, big and small, higher or lower capacity, can effectively benefit from the opportunities offered by the current media program and the successor program to overcome the structural constraints of the film industry in Europe that we have also heard in some of the presentations. So it is therefore reassuring that low capacity countries, so-called low capacity countries, are participating more and more in supported collaborations under the media program. So out of all the works, last example, I'm almost done. Of all the works we supported under the current program, 30% are collaborations, which involve countries with smaller audiovisual capacity. So this is a significant increase from the 5% under the previous program.
And we have still seen that the evaluation has shown us that still more can be done to continue and broaden the participation. So there is this potential that we started to see, altogether, based on the facts presented today. So we are looking very much forward to continuing the collaboration, and we're going back to our office with many great ideas to be taken into account in the work that we have ahead of us. Many thanks.
Nela Riehl
Yes. Thank you very much for your comments. I would like to thank all of the speakers for their comments and the input that you have given us today. As far as we're concerned, the whole ecosystem of film financing, where we've learned a bit more about it, we'll incorporate it into our work. So thank you very much to you, and I would like to wish all the members and everybody else a pleasant lunch break.
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