Competition ruling spells trouble for the City of Light

EC says Spanish subsidies to Ciudad De La Luz were illegal.

by Jennie Kermode

It's a filmmaker's dream, with over 30 square kilometres of sets and support facilities sitting beside the sea on the beautiful Alicante coast - but Ciudad De La Luz is in trouble. Its management company filed for bankruptcy in January and now the European Commission has ruled that government subsidies to keep it afloat were in breach of competition laws.

Despite the studio's popularity with filmmakers like Francis Ford Coppola, Competition Commission Vice President Joaquín Almunia is dismissive of its economic potential, arguing that a commercially minded investor would have located it closer to an established media centre like Madrid. Consequently, his Commission has ruled that no private investor would have stepped in when the Spanish government did, and that its support distorted the market and amounts to unfair competition. Mr Almunia also contends that Spain's film industry is thriving and cannot be said to need the extra funding.

Ciudad De La Luz has been ordered to repay €265m, with the Spanish government under a legal obligation to recover it. The studio's existing debt is believed to be around €195m.

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