Italy's film industry warns of damage from government funding cut

Rome’s 2026 budget cuts €150 million from film support fund

Alberto Barbera, Director of the 82nd Venice Film Festival, poses with host Emanuela Fanelli, a day before the start of the 82nd Venice Film Festival, in Venice, Italy, Aug 26, 2025. REUTERS/Yara Nardi

Italy's film industry, renowned for past masters such as Federico Fellini and more recently for Paolo Sorrentino's Oscar-winning "The Great Beauty", says its future is under threat from planned government cuts.

Rome's draft 2026 budget presented last week by Prime Minister Giorgia Meloni's right-wing government slashes 150 million euros ($175 million) from a 700-million-euro support fund for the industry, with another 50-million-euro cut scheduled for 2027.

The move will affect the tax credit incentive fund - introduced 17 years ago to relaunch the then-struggling sector - which allows producers to recover up to 40 percent of their investment costs.

"The cut is shaking up the entire industry," Stefania Balduini, founder of the production company Pistacchio Film, told Reuters.

"Tax credits are a tool that exists in almost all European countries and they are essential for financing projects. Fewer projects will be made, fewer crews will be working, and many will change jobs," she said.

THOUSANDS OF JOBS AT RISK

Italy's film sector associations said in a joint statement that the government's move "will cost thousands of jobs in a sector that is strategic for both the Italian economy and the country's international image."

Around 124,000 people are currently employed in Italy's film industry, television and radio sectors, they said.

The government already reduced the fund by 50 million euros last year.

The latest cut comes as Europe's largest film studio, Cinecitta in southern Rome, is striving to reestablish Italy as a cinematic powerhouse, planning to boost its production capacity by 60 percent by 2026.

Among the projects scheduled for filming there this year is Mel Gibson's "The Resurrection of The Christ," a sequel to his 2004 film "The Passion of The Christ."

Culture Minister Alessandro Giuli says the cuts are a necessary response to fraud in the industry which has seen numerous cases of so-called "ghost films" that have received generous subsidies but never actually been made.

One recent such case involved a tax credit of about $1 million granted to a US citizen now accused of committing a gruesome double murder in Rome, for a non-existent movie.

Some in the film industry say the cut is politically motivated, as members of Meloni's ruling coalition frequently suggest that Italy's culture sector, and particularly the film sector, is dominated by hostile leftists.