spainSpanish producers are braced for much deeper public funding cuts than those announced by Spanish film agency the ICAA. The top amount filmmakers can claim for through the automatic subsidy system – pegged to box office performance – is being halved to €400,000 ($500,000). The ceiling producers can claim through selective funding is being cut by 25% to €1.5 million.

But there’s worse to come next month, Fabia Buenaventura, head of the Spanish producer’s association, tells me. The Ministry of Culture is going to announce much deeper spending cuts. Spain’s producers are resigned given the country’s awful financial situation. First, there was Greece, then Spain. The government has just intervened to save a local bank from going under. There’s talk of Portugal and the UK being the next dominos to go down in this sovereign debt crisis.

Buenaventura says the cuts announced by the ICAA are not going to have a huge effect, given that they only affect a handful of films. It’s what’s coming next month that will really hurt. “This is just the first chapter,” she says, “although we expect the culture minister will try and be sensitive.”

Nadine Luque, a UK-based producer who works on Spanish co-productions, tells me the ICAA subsidy ceiling comes on top of state TV broadcaster TVE having its budget slashed – which means less money for local features – plus a dearth of Spanish banks willing to lend to the film industry.

“This is a triple whammy,” Luque tells me. “Spain is in freefall. Its problems are too big to be solved in one fell swoop in the way that Germany intervened to help Greece. Frankly, it’s a mess.”