Barrot eyes unspent budget funds for Galileo

Jacques Barrot, the European transport commissioner, will next week challenge EU member states to use unspent funds from the Union’s budget to finance the stalled Galileo satellite navigation system.

Galileo faces a €2.4 billion funding shortfall after attempts to create a consortium of companies to bring in private investment failed.

Barrot will propose to raise the €2.4bn from different budget lines including growth and competitiveness, agriculture and the EU’s institutions’ administrative costs.

The move will test member states’ commitment to the project as unspent funds are normally returned to national capitals and reduce their overall contribution to the Union budget.

Barrot’s plan will in particular challenge the French government which is traditionally strongly opposed to transferring unspent funds earmarked for the farm budget to other policies. Paris fears that it sets a precedent for cutting the proportion of EU spending for farming.

But currently high prices for agricultural commodities like beef, milk and cereals are saving the EU budget the costs of export refunds and buying into intervention.

The farm budget could provide €1.7bn for Galileo in 2008 and €0.7bn in 2009, according to Commission officials.

France is a strong backer of Galileo as it believes it is essential for the EU to have its own satellite presence to prevent the US dominating satellite navigation.

Barrot faces an easier challenge in convincing EU governments to raid the growth and competitiveness budget to finance Galileo. Budget ministers agreed in July to shave €548 million off spending for innovation projects in 2008 to provide extra money for Galileo.

But MEPs are concerned at squeezing the growth and competitiveness budget to finance Galileo and have called on EU governments to agree an increase in money for these programmes.

Transport ministers will discuss the funding of Galileo on 2 October.

Jacques Barrot, the European transport commissioner, will next week challenge EU member states to use unspent funds from the Union’s budget to finance the stalled Galileo satellite navigation system.