Over the past ten years an increasing amount of films from the Middle East have entered the international film festival circuit. Some major works like Paradise Now (Al-Jana Alan, Hany Abu Assad, NL/D/F/IL 2005), Caramel (Sukr Banat, Nadine Labaki, F/LB 2007), or Waltz With Bashir (Waltz Im Bashir, Ari Folman, IL/D/F/USA/B/CH/AUS 2008) also get theatrical releases in Europe and the USA. There they are often read as documents and authentic insights into a foreign culture. At the same time German funds boasted about the Oscar nominations for Paradise Now and Waltz with Bashir. Michael Schmid-Ospach, then head of influential Filmstiftung NRW was quoted in a fund’s press release of February 2nd 2006: ‘I keep my fingers crossed that Paradise Now will also take the Oscar to NorthRhine-Westphalia’, and the daily newspaper Hamburger Abendblatt stated on March 16th 2009 that Waltz With Bashir was ‘besides Uli Edel’s The Baader Meinhof Complex and Werner Herzog’s documentary Encounters at the End of the World yet another German iron in the award-fire’. Due to very high production costs of cinema movies, and a lack of funding in the region of origin, most of the financing for films from the Middle East is provided by European public funds. As ownership of a film is bound to financing, Paradise Now and Waltz With Bashir are indeed German movies. In this article I aim to look at the effects of co-production between Europe and the Middle East on the processes of production and the reception of the films. A short overview of public film policy in Arab Middle Eastern countries and Israel, as well as an example of European public media interventions in the Middle East, introduce key aspects of production and ideas behind European approaches to film-making in the region.