Europe gets green to meet U.S. challenge.

In the wake of the Europeans' Green Paper on the need to boost Euro production and distribution, and the European Union's audio-visual conference in Brussels, it seems clear that Europe is searching for effective new ways to meet American competition.

The new emphasis, moving away from protectionism, is on improving the European production structure, including distribution, rather than on quotas and subsidies aimed at curbing the Americans.

"The market share of our European films continues to shrink in the face of competition from imports...particularly from America," it was stated in the Green Paper, put out by the Commission of the European Communities. And it continued: "All fingers point at the weakness of European distribution structures as one of the factors identified as causing this phenomenon [of Europeans continuing to lose market share]."

At the Brussels meeting, heavily attended by vocal European government officials and industry executives, it was proposed to raise $1.5 billion to $2.5 billion to support European production in terms of loans and repayable advances. The big question was how to raise such a large amount.

Jack Lang, France's former culture minister, thought taxes on cinema tickets, video rentals, blank tape, film imports and even TV programs would be the way to do it, but acknowledged that this could spark a trade war.

Others proposed that one per cent of the European Union's entire budget should go to support not only better and more production, but also a pan-European distribution system, a move strongly opposed by virtually all of the American companies.

A striking feature of the Brussels conference was the absence of America-bashing, though the meeting was reminded frequently that 80 per cent of the European theaters' time was taken by U.S. features.

Professor Leon Schwartzenberg, the president of the Integroupe Cinema of the European Parliament, has urged European action to avoid "Europe becoming an advanced outpost of American civilization."

Prominent producers like Jeremy Thomas are quoted as saying: "There is a specific European cinema and it is threatened because of the strength of the U.S. industry."

In the past, the European response has consisted primarily of talk about strengthened quotas and other governmental measures designed to stem the flow of Hollywood imports and to preserve local culture. At this stage, comparatively few European countries (France included) have theatrical quotas, but they are adhering to EEC recommendations that half of their television programs consist of local and European shows.

France is probably the most restricted in its efforts to promote local production. It does not have a theatrical quota, but it does enforce its stringent TV quota. Further, the French impose a boxoffice tax which benefits French production and distribution. Spain has just installed a new import system which amounts to a quota and is linked to the number of Spanish productions being handled by a distributor.

Silent in all this are the European exhibitors who, in the end, are the ones who deal with the American companies and make a lot of money thanks to their releases.

At a recent meeting, they were furious when Dominique Wallon, the head of France's national film center, disclosed that the government would ask them to play more European films. This also did not please the Americans who feel very strongly that the market should be completely open and that Europeans - preferring Hollywood pictures - should be free to view them.

Still, the dominance of the American film does generate European resentment, particularly in the French production community which - in contrast to Germany and Italy - is thriving.

Joao de Pinheiro, the EU's cultural commissioner, recently issued a blast at UIP, the Paramount, Universal-MGM distribution combination, arguing that it was engaged in bad trade practices in Europe and that its exemption from the EEC anti-trust rules should be lifted. A decision on that is due soon. UIP, also in trouble in the U.K., has fought back, denying the charges and arguing that, any attempt to split it up on anti-trust grounds would jeopardize proposals to revitalize the European distribution system.

The American companies, seeking to counter-balance European complaints, are increasingly taking on European product for distribution in all or parts of the Continent. Perhaps significantly, this is particularly true of UIP which, for instance, has Les Visiteurs, an all-time French boxoffice hit. Disney's Buena Vista is handling Spain's Belle Epoque.

A recent statement from Albert Scharf, president of the European Broadcasting Union, underscored the perceived need for better European distribution. "If we want Europe to have a strong audiovisual media, we must first ensure that its productions are better distributed," he told the press.

The Europeans continue to be unhappy about their lack of success in the U.S. where, as individual industries, they are making little effort.

On the other hand, they underscore - as did the Green Paper - that their inter-European exports also are inadequate, and that only 20 per cent of European films make it beyond their national frontiers.