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BELGRADE (Reuters Life!) - Serbia basked in the Hollywood spotlight this spring as its capital became the backdrop -- and sometimes war zone -- for the screen adaptation of the lesser-known Shakespeare tragedy "Coriolanus."
After isolation during real wars in the 1990s, Serbia is hoping Coriolanus, starring Ralph Fiennes in his directorial debut and Gerard Butler, will usher in a new era of film production to a country that needs an economic and image boost.
"That is something very, very positive," Nadica Momirov, state secretary of the Serbian Ministry of Culture, said of Coriolanus, which finished filming this month. "It is very important for tourism and for the economy."
Since the fall of communism two decades ago, many countries in Eastern Europe have made hundreds of millions by luring film productions away from traditional U.S. or European locations, but Serbia remained largely forgotten until recently.
Amid good publicity around Coriolanus, Serbia's parliament is planning to debate a proposal next month to offer tax incentives or rebates for international film productions.
Colin Vaines, a Coriolanus producer who was an executive producer on films including "Gangs of New York" and "Young Victoria," said saving money is vital in today's tough economy.
"There are fewer people who want to put up money for films," he said.
Fiennes had to scale back the production, which ended up costing 30 percent less than once intended, but he praised Serbia for allowing him to film in the parliament and for lending interior ministry soldiers to serve as extras.
"Our production has gone pretty smoothly," Fiennes said in an interview. "The extras and the locations have been great."
"What I was most fearful of was locations being pulled on me at short notice, for reasons that someone wanted more money or something like that. That has not happened."
Gabrielle Tana, another Coriolanus producer, said filming in Serbia was 20 percent cheaper than in Hungary or the Czech Republic and as much as 50 or 60 percent cheaper than in traditional locations such as London or Paris.
Barbara Sandic, an executive director at Serbia's ambitious new private studio, PFI, said Yugoslavia and its huge Avala Studios also had a longer tradition of filmmaking than newer locations such as Romania and Bulgaria.
"Therefore our art department, the construction of sets, is much more ... favorably priced than anywhere else," she said.
The Serbian Film Commission and others want the government to sweeten the pot further, perhaps with a 15-percent cash rebate on funds spent by international productions, hoping it could make a big difference.
Hungary saw revenue from foreign films and co-productions grow more than 10-fold from 2004 when it introduced a 20 percent refund for foreign movie productions. Such productions spent 35.3 billion forints (126 million euros) in 2009, according to Hungary's National Film Office.
Such income represents a small fraction of annual GDP, but does raise a country's profile and, often, prestige. An exception was the comedy "Borat," which angered Romanian villagers by portraying them as anti-Semitic and backward.
Serbia's film revenues are far lower. International film productions including commercials are expected to bring in more than $20 million this year, up from $10 million last year and $6 million in 2008, according to the Serbian Film Commission.
Coriolanus was a major reason for this year's boost, and just as their crew was packing up earlier this month, Italian state television began several months of filming a series.
Serbian President Boris Tadic has also appealed to Hollywood to come to Serbia.
In addition to considering new incentives for filming, Serbia wants to resell the Avala studio, which has not made a movie in years because of the bankruptcy of its majority owner, according to Momirov of the Culture Ministry.
The government, which owns 40 percent of the studio, is hoping to acquire another 11 percent so that it can sell off a majority stake and revive the entity, she said.
Others in Serbia are already betting on the industry's potential.
Pink Media, a private firm which owns several Balkan TV stations, has built PFI Studios just outside Belgrade and is anxious to attract U.S. and European film productions.
Sandic of PFI said the complex of nine sound stages will end up costing roughly 100 million euros when finished next year.
A few Hollywood stars are already lined up to film in Serbia in 2011 including Johnny Depp who should play Mexican revolutionary Pancho Villa under Serbia's best-known director, Emir Kusturica, with Selma Hayek co-starring.
Additional reporting by Ivana Sekularac in Belgrade and Marton Dunai in Budapest; editing by Zoran Radosavljevic and Steve Addison