Italy's film industry reels as govt slashes cultural fund

Producers warn of mass job losses as Rome cites subsidy fraud

ROME:

Italy's celebrated film industry, once home to the golden visions of Federico Fellini and more recently Paolo Sorrentino's Oscar-winning 'The Great Beauty', says it is facing an existential crisis after sweeping government funding cuts.

Prime Minister Giorgia Meloni's right-wing government last week unveiled its 2026 budget, reducing the €700 million support fund for film and television by €150 million, with another €50 million cut expected in 2027. The move targets the tax credit incentive scheme introduced 17 years ago to revive a struggling sector.

"The cut is shaking up the entire industry," said Stefania Balduini, founder of Pistacchio Film. "Tax credits exist in almost all European countries and are essential for financing projects. Fewer projects will be made, fewer crews will be working, and many will change jobs."

Industry associations warn the decision could cost thousands of jobs and jeopardise Italy's international cultural standing. Around 124,000 people are currently employed in the country's film, television, and radio sectors.

"The government's move will cost thousands of jobs in a sector that is strategic for both the Italian economy and the country's image," said a joint statement by producers' groups.

The blow comes as Cinecittà - Europe's largest film studio - is attempting to re-establish Italy as a cinematic powerhouse, with plans to expand production capacity by 60 per cent by 2026. Among major projects set to shoot there this year is Mel Gibson's 'The Resurrection of The Christ', sequel to his 2004 hit 'The Passion of The Christ'.

Culture Minister Alessandro Giuli defended the cuts, saying they respond to widespread fraud in the tax credit system, including so-called "ghost films" that secured generous subsidies but were never produced.

In one recent case, a US citizen accused of a double murder in Rome allegedly received a $1 million tax credit for a non-existent film. "The public can no longer finance scams," Giuli told reporters earlier this month, insisting oversight must precede expansion.

However, many in the industry say the move punishes legitimate filmmakers rather than curbing corruption. Critics argue that Meloni's coalition has long viewed the arts community as politically adversarial. "There's a perception that the cultural sector leans left, and this feels like a retaliation," said a producer, requesting anonymity to avoid political backlash.

The government had already trimmed the fund by €50 million last year. This second round of reductions, insiders warn, could halt the momentum that followed Italy's post-pandemic revival of its film sector - a revival fuelled largely by international co-productions and streaming giants choosing Italian backdrops.

"Foreign producers invest where there is stability," said Balduini. "If the incentives disappear, they will move to Spain, Hungary or Greece overnight."

Beyond the economics, the debate cuts to the core of Italy's cultural identity. Cinema, once one of the country's proudest exports, is now caught between politics, fiscal restraint and scandal. As the smog of austerity settles over Cinecittà's rebuilt sound stages, many fear Italy may again become a location for others' stories, not its own.

Whether the Meloni government will reconsider the cuts remains uncertain. For now, Italy's filmmakers are left facing what they describe as their toughest scene yet - one in which creativity must battle bureaucracy for its survival.