Brussels decision sentences Alicante's Ciudad de la Luz studios to a slow death

Neither the visits of Francis Ford Coppola nor Asterix have managed to polish the image of the Ciudad de la Luz film studios in Alicante, the future of which now looks darker than ever.

The European Commission (EC) has ruled that the 265 million euros' worth of subsidies given by Valencia's regional government to finance the project were illegal, and has ordered the money to be returned to the Generalitat's coffers within four months. The resolution by the European head of Competition Policy, Spaniard Joaquín Almunia, considers that the financing "enormously distorts competition between the main studios of European cinema."

Regional premier Alberto Fabra said he would appeal the decision, which resolves a complaint brought in 2007 by two audiovisual companies from two EU member states, to the European Court of Justice. The regional government declined to offer more details as to how the money would be paid back.

The resolution comes at an especially delicate moment for the Ciudad de la Luz, which is immersed in a string of legal procedures and is facing debts of over 190 million euros. The firm chosen to run the studios when they opened in 2005, Aguamarga Gestión de Estudios, began bankruptcy proceedings in December 2011 due to, among other things, non-payment to the Valencia regional government. The Generalitat is now considering selling or renting the complex, but sources say the decision complicates a sale as the price now cannot be lower than the 265 million it needs to give back.