Cannes review: Canine accolade and Hitler's return are high spots amid the gloom

From left: Cheryl Cole wearing Stephane Rolland, Natasha Poly wearing Gucci and Diane Kruger wearing Nina Ricci

Cannes 2012 was the dampest festival in recent memory and one of the more muted. The Croisette – the main sea-front thoroughfare – was as crammed as ever but the European film industry is clearly feeling the pinch. The yachts seemed smaller this year, the restaurants emptier. The sales agents presenting new films in the market grumbled privately that Italian and Spanish distributors simply weren't buying any more.

For the Brits, though, this was a solid festival. A British dog won the (admittedly not especially coveted) Palm Dog – the annual competition for best canine performance. This was Smurf, the fluffy mutt who appears in Ben Wheatley's Sightseers. The Brits also threw one of the better beachfront parties, for Plan B's Ill Manors.

Producers in Cannes always make outlandish announcements. The most jaw dropping was when Tero Kaukomaa, the genial Finn behind Nazis-on-the-moon saga Iron Sky, earnestly explained his intentions to use digital techniques to bring Adolf Hitler back to life for his live-action, time-travel movie I Killed Adolf Hitler. If he was worried about offending anybody, he certainly didn't show it.

Harvey Weinstein, the producer, was to be seen huffing and puffing in the lifts of the Majestic Hotel and was reportedly barracked by Alec Baldwin (in town to make a Cannes mockumentary) at a party. Weinstein, in spite of the sometimes patchy box-office performances of the films he champions, is as close as Cannes comes to its own Midas. His touch helped turn The Artist into an Oscar winner after its Cannes premiere last year. Maybe Weinstein will be able to do something similar for Killing Them Softly, Andrew Dominik's grimly funny mobster thriller – although, with its scenes of Ray Liotta vomiting and James Gandolfini making lewd and obscene threats to prostitutes, this probably doesn't qualify as a crowdpleaser.

The festival's director Thierry Frémaux was scolded by everybody (from veteran auteurs like Agnès Varda to the international press) for not including any women directors at all in the main competition.

At the same time, the Danish film-maker Thomas Vinterberg (director of The Hunt, one of the best films in this year's Cannes) was busy lamenting the crisis in masculinity in Scandinavia.

"I had visitors from abroad, from England, and they were laughing: they saw all these couples where there was this huge beautiful tank of a woman, with a lot of height and power, on a cellphone doing deals and, right next to that, you have the husband with a trolley and kids," Vinterberg confided.

Behind the scenes all week, long-faced representatives of national film agencies were rushing to and fro, becoming increasingly exasperated at the European Commission's new proposals for state aid for film. This is all complex stuff, but boiled down to its essence, what could happen – if the EC's proposals are pushed through – is the collapse of the entire European film financing system.

The consequences for Cannes would be dire. Not that anyone really wanted to think about such grim matters when, at last, the sun began to shine again and the hucksters could sit back out on the Carlton Terrace, drink the Bandol rosé and talk up their projects.