Germany is looking to up the ante on its already generous film subsidies with a new fund worth up to €75M ($80.4M) a year and geared specifically toward bigger-budget productions.

Here’s why this is significant: Germany typically has been an attractive location for international co-productions thanks to its German Federal Film Fund (DFFF), but, despite having a strong studio facilities sector and top-notch crews, the country has been under pressure to compete with attractive incentives offered in neighboring Eastern European countries as well as the UK.

The scheme, dubbed DFFF2, was announced on Thursday by Culture and Media Commissioner Monika Grutters, who also confirmed that the country’s Ministry of Culture is planning to double its annual subsidy pot to €150M ($160M) starting next year.

Germany creates $80 million fund to lure Hollywood
Studio Babelsberg

While the move certainly will be a boon to the local industry, this new $80M fund is earmarked for attracting international and Hollywood productions with a planned theatrical release. Sources tell me that the fund even might kick off later in 2017, meaning titles looking to go into production for the second half of the year could be eligible to tap into the subsidy. What’s even more interesting is that DFFF2 might not require applicants to have a German co-producer — unlike DFFF. That means a German production services company, or a studio like Studio Babelsberg or Bavaria Film Studios, could apply on the production’s behalf.

I’m hearing that productions looking to tap into DFFF2 might have to spend a minimum of €25M-€30M to access a rebate of 25% of eligible German costs. And it will mean that applicants won’t be able to access both funds — they’ll have to choose one or the other. DFFF will continue more or less as before, with DFFF2 not able to be combined with other Federal German Film aids.

Earlier this year, DFFF upped its budget from €25M to €50M ($43.7M), a hike that boosts its attractiveness in the co-production space. The country’s studio facilities sector is solid. For example, Studio Babelsberg, one of Europe’s top production facilities, which has housed projects such as The Grand Budapest Hotel and Inglourious Basterds, has just undergone a huge update. German crews are some of the best in the world. However, the country has come under increasing pressure to compete on an inward investment level with Eastern European countries such as Hungary and the Czech Republic. Hollywood, meanwhile, feeds a lot of its big-budget projects into the UK, which offers a generous 25% tax rebate, but with UK facilities bursting at the seams, Germany now could become an even more attractive location to shoot.

Of course, this is all subject to the government’s final decision on the funding hike, which isn’t expected to be cleared until after Germany’s national elections in September.