European Commission seeks to divert EU budget surplus to fund satellites
BRUSSELS: The European Commission on Wednesday proposed salvaging the European Unions faltering satellite technology project by diverting \2.4 billion from the blocs budget, a move certain to come under fire from member national governments.
At stake is whether Europe will be able to launch Galileo, a \3.6 billion, or $5 billion, European-controlled satellite navigation system to rival the U.S. Global Positioning System, or GPS, which is controlled by the U.S. military. Europe wants its own system to assure its strategic independence, since GPS signals can in theory be unilaterally turned off.
Critics of Galileo, however, call it a technological white elephant and argue that as a symbol of technological prowess it has pushed the commission to put hubris ahead of economic sense. The original timetable for the project was abandoned in June after a consortium of eight companies from France, Germany, Spain, Britain and Italy could not agree on how to develop and finance it.
Jacques Barrot, the European transport commissioner, was emphatic Wednesday that Galileo should not be abandoned if Europe wanted to retain its independence. He said the EU could raise the extra \2.4 billion required to finance the project from 2008 to 2013 with unused funds in the blocs \100 billion budget.
“I am still convinced that Europe needs Galileo,” Barrot said. “We cant let this opportunity slip.”
Barrot said part of the new financing of Galileo could come from leftover funds earmarked for the agriculture sector, for research and for running the EU civil service. In particular, he noted, a recent rise in commodity prices had diminished the funding the EU needed to provide for farmers, allowing the union to divert \2.1 billion in unused agricultural funds for 2007 and 2008 to Galileo.
Barrot, a Frenchman, acknowledged that his financing plans, which must be approved by EU member governments, could face difficulties, given that any surplus would normally be pumped back into national budgets. He said touching this money would require overcoming “a taboo.”
Officials from Germany, which has previously expressed reservations about the financial viability of the project, said they feared that using money from the EU budget could create a bad precedent. Industry insiders have expressed reservations about Galileos business model, since the American GPS system is offered for free to businesses worldwide, while Galileo plans to charge users for an encrypted signal. Others fear overruns will saddle EU taxpayers with an enormous bill.
“It is important to make sure the project works before money is diverted into it,” said a German official, requesting anonymity because he was not authorized to speak to reporters. “Beyond taking savings away from national budgets, the risk if that if we fund Galileo in this way, other underfunded EU projects will start scrambling for this money too.”
Other EU diplomats echoed this skepticism, saying they were concerned that Galileo had become a personal quest for Barrot - and the commission - rather than a technological necessity. “This seems to be more about assuring Barrots legacy than about business sense,” said one official, who requested anonymity because his country had not yet determined its stance on the funding issue.
Simon Michel-Berger, a spokesman for an association in Brussels representing 10 million European farmers, objected to using savings from the agriculture budget to fund a satellite program at a time when European farmers needed help. “High farm commodity prices may help some farmers, but they punish others, like poultry producers, who have seen their costs go up, and this money could be used to help them,” he said.
If it gets off the ground, Galileo would consist of a network of 30 satellites sending radio signals to receiving devices, like those in cellphones, to help users precisely pinpoint locations. Its champions say the system would have broad application and provide essential data for to the telecommunications and traffic sectors, for example. Barrot said the technology - which developers say is more precise than U.S. rival GPS - also could be used in EU military missions.
Yet critics say whatever the benefits of Galileo, they have been more than offset by the hurdles facing the project. So far only one of Galileos satellites has been launched, in December 2005. The second satellite missed its autumn 2006 launch date after it short-circuited during a test.
EU transport ministers will debate the financing of the project at a meeting in October. Barrot warned Wednesday that a final decision on financing must be made this year for the system to be in orbit by 2013.
