A. A secret agreement took place between both nations
B. So that they will celebrate their international festivals in alternating years
C. Although the initial spirit of the British festival was to compete with its Italian counterpart
D. The first Cannes Festival had a considerable success
E. The festival was relaunched after the War in 1940, in the old Casino of Cannes, financed by the British Foreign Affairs Ministry and the City of Cannes
ECABD
There is a strong link between statements C and A. 'Both nations' mentioned in A is referring to Britain and Italy mentioned in statement C. This idea is further continued with statement B which talks about the details of the 'secret agreement' between the B nations. Thus, a strong CAB link is established. This eliminates all the other options except C.
Hence, the correct answer is option C.