Cablegate: Spain Toys with Idea of Cultural Exception

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 MADRID 002795

SIPDIS

SENSITIVE

STATE FOR EUR/WE AND EB/TPP/MTA/IPC; PLEASE PASS TO USTR
SANFORD; COMMERCE FOR CALVERT

E.O. 12958: N/A
TAGS: ETRD KIPR ECON KPAO SP
SUBJECT: SPAIN TOYS WITH IDEA OF CULTURAL EXCEPTION

1. (SBU) SUMMARY: Spain's new Minister of Culture has vowed
to find ways to help the Spanish film industry. The press
has seized on her sometimes over the top remarks and is
reporting that the GOS is pursuing a policy of cultural
exception along the lines of the French model. A high-level
Ministry of Culture official and contacts in the film
industry say that press stories are not accurate and that the
ministry is looking for innovative, but non-discriminatory
measures to help Spanish film makers. To this effect, on
July 9 the Spanish Council of Ministers approved implementing
legislation that will allow the GOS to collect funds from
television operators to support the Spanish film industry.
The Ministry of Culture official in charge of audiovisual
industry policy has pledged to work with the USG and keep us
informed of any policies being considered that may impact on
U.S. industry. END SUMMARY

2. (SBU) Since Spain's new socialist (PSOE) government named
Carmen Calvo as Minister of Culture in May 2004, she has
shown a knack for breaking new ground and unabashedly
speaking her mind, usually before consulting within the PSOE
government or within her own ministry. In several short
months she has already had to walk back a number of
announcements once she discovered that her ministry did not
have competency to do what she had promised. (One notable
example was her promise to lower value added tax for CDs and
DVDs only to discover that the tax levels are determined in
Brussels.) Nonetheless, we have watched with special
interest her pronouncements on her intention to bolster
Spain's cinematography industry. At a number of film
industry events, she has repeatedly said that part of her job
is to bolster the Spanish film industry and ensure that the
bigger players in the market (read U.S. film studios) don't
push the Spanish industry to the brink. In a trip to Brazil
earlier this month, she signed an accord pledging to work
with Brazil, Algeria, Austria, Mali and Mexico to pursue
special treatment for cultural diversity in the World Trade
Organization.

3. (U) Not surprisingly, since Calvo took office, Spanish
newspapers have carried numerous articles suggesting that the
new PSOE administration has decided to pursue a policy of
cultural exception similar to France. Some articles cast it
in terms of a battle to protect the Spanish film industry
from its U.S. counterpart. While no one seems to have an
especially clear idea of what a policy of cultural exception
consists of, uncertainty has not prevented journalists and
pundits alike from expounding on a variety of policies they
believe the government is or should be considering. One
potential measure mentioned is expanding the screen quota
beyond the current permitted ratio in Spain of one European
film for every three foreign films. Another idea is a
dubbing tax which would be charged to theaters for carrying
dubbed films. Consumer groups in Spain immediately expressed
their opposition to this idea as they expect that any tax
will be passed on to consumers in the form of higher prices
for foreign films. Other stories mention dubbing licenses,
measures that were in place many years ago but removed by a
previous PSOE administration 8 years ago.

4. (U) On July 8 we met with Manuel Perez Estremera, newly
named Director General for the Institute of Cinematography at
the Ministry of Culture. He reports directly to Minister
Calvo. We expressed our concern with the current buzz
suggesting that Spain was looking at following the French
lead and pursuing a policy of protection for its film
industry. Perez lamented the inaccuracy and in some places
the complete fiction included in recent press stories. He
agreed that Calvo is determined to work in the best interests
of the Spanish film industry, however he brushed aside the
suggestions of expanded screen quotas or dubbing taxes or
licenses. He underscored that these measures have not even
been discussed in the ministry.

5. (U) At present, the Ministry's main objective is to
provide Spanish film makers with extra funding. Since 1999,
a Spanish law transposing the EU Televisions without
Frontiers Directive has required that Spanish television
operators pay 5% of earnings into a special fund to finance
European film makers. 60% of the funds collected are
supposed to go to the Spanish industry. Since 1999, the law
has been applied in a haphazard way. Television stations
have paid voluntarily, but it is estimated that they have not
paid the half of the sum required by law. Without
implementing legislation, the GOS has been unable to enforce
the law. According to Isabel Hernandez, Deputy Director
General for Audiovisual Issues at the Ministry of Industry,
the previous Partido Popular (PP) administration had been
meeting with stakeholders and discussing how to implement the
law for four years. The PSOE administration decided to work
off the previous administration's foundation and completed
work on the implementing legislation in three months. Two
days after our meeting with Perez, the Council of Ministers
approved the implementing legislation. It entered into force
on July 21. The GOS will now have an accounting system and
infrastructure to give them the ability to track and collect
the funds.

6. (U) In our meeting with Perez, he stressed that the
Spanish are not interested in getting into a fight with the
U.S. industry. He said their intention is to study why the
Spanish industry has not been successful and to look for
innovative ways to help the industry. He underscored that
they will look at measures that are not discriminatory and
the process will be transparent. "If we are looking at
measures that would affect the U.S. industry, we would
contact you and discuss it with the Embassy and the Motion
Picture Association." Perez went on to say that there are a
number of areas where the GOS and USG have the same
interests and said he would like to deepen collaboration with
the United States on piracy.

7. (SBU) Comment: The summertime is a time when the Spanish
press and government bureaucrats often release trial balloons
in newspapers in an effort to gauge public reaction to their
ideas. This, combined with a minister who has a tendency for
speaking off the top of her head and without basis, has
caused the cultural exception idea to flourish, at least in
the press. Perez, on the other hand, is not an impulsive man
and has a reputation for consensus-building. What is unclear
is how much power he has and if he will be able to rein in
the minister if she seizes on a measure that discriminates
against foreign films. For the time being, we do not see
that there is any cause for alarm. However, we will continue
to express our interest in this area to our contacts in the
Ministries of Culture and Industry.
MANZANARES

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