Commission and presidency in bid to save Galileo project

The European Commission and the Portuguese presidency have prepared new compromises to try to save the Galileo satellite project, ahead of negotiations on the 2008 budget at the end of this week.

Jacques Barrot, the European transport commissioner, has presented a new proposal for sharing out contracts for Galileo, to address concerns expressed by member states, such as Germany, that they would not win their fair share of the work generated by Galileo. Under the proposal, companies would not be able to bid for more than two out of seven main contracts.

Member states are still divided over how to find an extra €2.4 billion to fund the project after an industrial consortium collapsed. Germany, the UK and the Netherlands are opposing a proposal from the Commission which would take the required funds from the EU budget for farm support and administrative spending.

MEPs, who can block spending decisions, are urging EU governments to commit fresh money for Galileo.

"We are optimistic," said a presidency spokesman ahead of a meeting of finance ministers and MEPs tomorrow (23 November), which will try to resolve outstanding differences.

German centre-right MEP Reimer Böge, chairman of the budgets committee, said that unless member states agreed to fund Galileo from the EU budget, Parliament would block plans to give €151 million for the project next year. "If they go in the other direction, this money is lost," he said.

In addition to the €151m governments have agreed to dedicate to Galileo, MEPs want an additional €739m from the budget for growth and competitiveness, taking the total to €890m next year.

MEPs are strongly opposed to a German proposal to fund Galileo via the European Space Agency where governments would have a guaranteed share of work based on their financial contribution.

If budget ministers can agree a financing package for Galileo, transport ministers will have to agree the organisation of the project on 29 November. The issue may have to be settled by EU leaders at their meeting in Brussels on 14 December.

Ministers and MEPs also have to find agreement on the overall level of spending for next year, with MEPs asking for a budget for payments of €115.497bn, compared to the €114.326bn that member states can accept.

The European Commission and the Portuguese presidency have prepared new compromises to try to save the Galileo satellite project, ahead of negotiations on the 2008 budget at the end of this week.