Steve Chiotakis: The Venice Film Festival is underway this week in Italy. And in a city where water and canals are the main attraction, a sunken piece of land is a stark reminder of Europe’s financial crisis.

The BBC’s Emma Jones reports from Venice.

Emma Jones: Three years ago, Venice Film Festival started ambitious plans to build a $170 million state-of-the-art cinema complex. The first part of funding, some $54 million, was spent on excavations and dealing with toxic asbestos, which was found during the digging of the proposed site.

But the project ran out of money, thanks to Italy’s economic woes, and so what’s left is a literal crater, right next to the red carpet.

Mark Adams is a chief critic of industry magazine Screen International. He says since the global economic crisis of 2008, the challenge for Venice is to continue to attract American interest.

Mark Adams: Any film wants that big american deal. They (big american studios) don’t come in as many numbers because it’s too far away and it’s just before Toronto for them – and it’s very expensive here.

As studios batten down the hatches and commission only safe box office bets, more names are flocking to make independent cinema, of which Venice is a champion. So this year Kate Winslet and George Clooney are all here for films by directors like David Cronenberg and Roman Polanski.

In Venice, I’m the BBC’s Emma Jones, for Marketplace.