Cinema was invented by the Lumiere brothers in France in 1895. French Film Makers such as Jean Renoir, Ren� Clair or Marcel Carn� created the legend of French cinema.

On the opposite, American Cinema has been, since its beginnings a genuine industry. America’s movie production represented already a large majority of the world’s production in the beginning of the forties. Between 1940 and 1950, at the top of their popularity, American studios released as far as 400 movies per year.

French government reacted to this preeminence of the American movie industry in 1945, by creating a state financing system, endeavoring French production. The expression of “The French Cultural Exception” appeared. This financing system and its institution, the Centre National de la Cin�matographie “CNC” (the French Cinematographical Center) are still in function.

The gap between these two logics still remains.

On one side, American cinema, considered more industrial is controlled by a few big Majors, which aim is to produce profitable blockbusters, for which they invest increasingly high budgets.

On the other, the French financing system remains egalitarian, most of the financing means consisting of a tax on the movies exploitation (whether in theaters, by video, DVDs, television). Besides, State (CNC) authorized financing companies, the SOFICAs, were created in 1985, in order to help to finance movies, the SOFICAs being paid on the results to come. Different Region Financig aids exist as well.

This system ensures a certain cultural diversity and maintains what can be called, an author cinema production.

It must be underlined that part of the American “independent” movie-makers such as Lynch, Jarmush or Woody Allen benefit from this system, their movie being co-produced by French producers such as STUDIO CANAL.

The European Union position can be considered as a cross-over of the above-said opposite logics.

The European Union competition rules do apply to cinema. However, article 87 of the European Union treaty recognizes the possibility recognizes the possibility of State Members financial aids in cultural fields as long as they do not disrupt free competition.

Moreover, European Union has its own cinema aid system, called MEDIA+, which aim is to favor distribution of European television programs such as documentaries, as well as European movies on screen, or on videos or DVDs.. MEDIA+ budget is of 400 millions of Euros, to be shared by 17 countries in a five years period (2001-2005). This budget as been decried as being far too low.

Moreover it has been question to create an European Film Award.

The question remains : Will European Countries give itself the means of being competitive against the American production, for instance by creating European production and distribution companies which would enable a wider distribution ? Is the European Union ready to define a true policy of defense of the European movie production and know how to create the concept and means of an European cultural identity, which would prevail on the sole free-competition issues ?