Prime Minister Einars Repse promised not to close the curtain on Latvian filmmakers when his government drafts next year's budget, reversing an earlier threat to cut all funding for the struggling industry.
At a Cabinet meeting last week, Repse said he wanted to cut off state support for films to focus on more pressing needs, chiefly costs associated with joining NATO and the European Union.
Filmmakers were incensed, saying the move would cripple the industry, sully Latvia's reputation and do irreparable damage to cultural well-being.
"Our image would be spoiled for years. Latvia would be known as the only state that doesn't support its filmmakers," said Andrejs Apsitis, deputy director of the National Film Center, a union that promotes and funds local productions.
After a meeting with Culture Minister Inguna Ribena, Repse changed his tune and promised the industry funding comparable to this year's shoestring budget of 600,000 lats (1 million euros).
Finance Minister Valdis Dombrovskis said a final decision to cut funding was never made. "This was all a lot of noise about nothing," he said.
But even with this year's funding maintained, filmmakers say they get barely enough for survival. On 600,000 lats, Apsitis said the industry averages two feature films and a few documentaries a year.
State funding for Latvia's film industry is about two-thirds of the roughly 2.1 million euros Estonian filmmakers enjoy, which itself is almost insignificant by comparison with Denmark (36.6 million euros) or Italy (97.4 million euros).
Though Latvian directors have perfected the art of making feature films at a measly 200,000 lats - the cheapest films made in Germany or France, Apsitis said, cost about three times more - profits remain unheard of.
Investment is almost impossible to attract, as the small market tends to preclude any chance for high returns, forcing filmmakers into coproductions with other European countries.
"Even if everyone in Latvia pays 2 lats each to see a film, we're still talking very small money," said Kristians Luhaers, head of production at the National Film Center.
Still, a group of recent films have been well-received. This year's "Leaving by the Way," loosely based on a Latvian fairy tale, and 2001's "Good Hands," a collaboration with Estonian director Peter Simm, both won favorable reviews at foreign festivals.
Latvia has also secured a reputation for documentaries, thanks largely to the late glasnost- era filmmaker Juris Podnieks, whose films about the Soviet collapse were shown on American and British television.
The Riga-based Podnieks Film Studio is currently producing a project about the 1995 banking collapse that wiped out thousands of Latvians' savings.
But scraping up cash remains a struggle. Public television can only afford to pay 300 lats for rights, a mere fraction of the 50,000 lat production price tag, said director Antra Cilinska.
"Culture is as essential to a country as wood or timber or other exports," Cilinska said. "Is 600,00 lats really going to make or break the budget?"