The European Commission has approved a €43 million Latvian film support scheme until 31 December 2013 under EC Treaty state aid rules. The six-year scheme covers all Latvia's film support measures including film development, production and distribution of Latvian and European films, particularly in rural Latvia. The Commission found that the scheme is compatible with the cultural derogation of the EC Treaty and in line with the 2001 Cinema Communication rules concerning aid to film production. The Latvian authorities will implement any changes that may be required after the expiry of the Cinema Communication.

Competition Commissioner Neelie Kroes commented: "I warmly welcome the close cooperation provided by the National Film Centre of Latvia and the Latvian State aid Control Department. This helped the Commission to appreciate the difficult situation facing Latvian film culture and to approve the scheme quickly."

The main objective of the Latvian film support scheme is to support and promote the development of Latvian film culture, particularly in rural areas. The Latvian film support scheme includes direct grants for film development, production and distribution. With a population of 2.3 million, there are only 14 full-time cinemas and 46 screens in total throughout the country (compared to 1,103 screens in 1990). Since these are mainly concentrated in Riga, Latvian and European films would be inaccessible to people living outside Riga without the support provided by the scheme.

The Commission's assessment of the direct grants for film production was based on the EU state aid rules in the 2001 Cinema Communication (IP/01/1326). For the other types of support, the Commission assessment referred to the rules in the Cinema Communication in applying the cultural derogation in Article 87.3(d) of the EC Treaty.

The non-confidential version of the decision will be made available under the case number N 233/2008 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.