After reaping the rewards of a protracted growth spurt, Italy‘s film industry is facing a forced slowdown as the country’s right-wing government dithers with modifications they plan to make to several key regulations, most significantly to the country’s now stalled tax incentives for film and TV production.

At a packed protest event held earlier this month in Rome’s Cinema Adriano multiplex, industry figures from all sectors – including producers, writers, actors and big-name directors such as Paolo Sorrentino and Marco Bellocchio – lashed out against having to wait endlessly for the government to approve new guidelines so production companies can apply for the 40% tax credits that basically drive the business. Some are also concerned that their projects might end up not complying with still murky new eligibility criteria.

“We are waiting for the new regulatory framework, and more importantly we need to know how much money the government will grant,” said producer and distributor Andrea Occhipinti, chief of prominent Italian indie Lucky Red, during the Rome event.

In mere monetary terms, Italy’s culture minister Gennaro Sangiuliano has assured that the government plans to only shave off some €50 million from the 2024 tax credit pot that is expected to end up totaling about €700 million ($744 million) this year. The problem is that it’s still unclear when this tax credit money will actually become available as the government – which appears to be divided on this matter – continues to keep the industry on standby.

“On the tax credit, we ask first of all for speed and certainty, because the film industry cannot wait,” Occhipinti noted more recently during a film industry confab held last weekend in Ortigia, Sicily. A further delay, he added, “would amount to a failure in favor of other countries that now also have this fantastic tool in place as an incentive to attract productions and produce more locally.”

Malta, to cite one example, recently raised its cash tax rebate from from 27% to 40%.

As several Italian industry observers have pointed out, Italy’s 40% tax credit has been the crucial factor in luring back Hollywood productions to Italy on a scale comparable to the 1950s and ’60s glory days, when the now radically revamped Cinecittà studios were known as Hollywood on the Tiber. More than 40% of Italy’s tax credit in the past couple of years has gone to international productions shot entirely in Italy, such as HBO’s Sicily-set “The White Lotus” Season 2, Steven Zaillian’s “Ripley” that recently dropped on Netflix and Amazon Prime’s upcoming gladiator series “Those About to Die,” which was fully shot at Cinecittà.

Among bones of contention that have been holding things up is the fact that the right-wing government wants to promote production of movies and TV series with a nationalistic narrative, so they are planning to allocate some €52 million of the tax credit pot for film and TV products about stories and characters “tied to Italy’s national identity,” as Sangiuliano has put it. Another issue the culture minister has pointed out is the purported waste of tax credit resources under the previous center-left government represented by the fact that, according to culture ministry figures, 345 of the 459 movies supported by Italy’s tax credit in 2022 and 2023 have not had a theatrical release. In some cases, this is simply due to the fact that they went straight to streaming or TV.

“Our film industry is growing, but within the international arena we are still small,” said producer Raffaella Leone, head of production and distribution company Leone Film Group — founded in 1989 by her father, spaghetti Western master Sergio Leone — speaking in Ortigia during a panel on Italy’s tax credit.

“As a producer, to have €52 million earmarked for products that highlight Italian characters is not what our country needs,” Leone added. “I think we need to make more movies for the international market, which doesn’t mean demeaning ourselves or losing our identity.”

Leone went on to express hope that by modifying the country’s tax credit for film and TV production, the Italian government won’t scare Hollywood off.

“The image of this country that we are providing is unreliable,” she said. “Foreigners are becoming afraid to invest here because of the uncertainty that characterizes us. This is not a time in which we can afford to grind to a halt.”

Also attending the Italian industry panel in Sicily was journalist and writer Pietrangelo Buttafuoco, the new president of the Venice Biennale, the foundation that oversees the Venice Film Festival. Buttafuoco will be instrumental in deciding whether to renew the mandate of Venice artistic director Alberto Barbera, who has one year left on his contract following the fest’s upcoming 2024 edition. According to several sources, it now appears likely that Barbera — who has turned Venice into a potent springboard for awards winners such as, most recently, “Poor Things” — will be staying at the festival’s helm even after the upcoming edition is over.

But, just like the tax credit and everything else pertaining to government influence over Italy’s film industry, at the moment even Barbera’s permanence at Venice is not yet a done deal.

Article originated in: Variety