Commission to fine-tune Galileo funding proposal

After an exchange of views on the financing of Galileo, the Council has asked the Commission to re-examine its funding proposal before the EU’s 2008 budget council next week.

“Galileo needs be financed through the Community budget,” said Portuguese Finance Minister Fernando Teixeira dos Santos after the Ecofin Council met on 13 November 2007 to discuss the financing of the European global navigation satellite system Galileo.  

He said that Germany had reiterated its demand to see individual states contribute the extra €2.4 billion to the European Space Agency (ESA), which could finance and manage the project. “But they were alone in doing so. There was no agreement or support for that from the others. In fact, a number of member states actively doubted whether it would be possible to approach Galileo funding from the German angle.” 

The Commission’s favoured funding option consists of full public-sector financing for the construction of the Galileo satellite infrastructure by 2012, after which the exploitation of the operational satellite system could be done in a public-private partnership. This proposal is backed by the European Parliament and by a majority of the EU 27, as it would help avoid a situation where some member states would contribute more, making Galileo vulnerable to the principle of juste retour (a proportional return on investment). 

This funding option would, however, imply re-opening the EU’s long term budget for 2007-2013 so that more money could be allocated to Galileo in addition to the €1 billion already set aside. It is, however, highly unlikely that the financial perspectives will be re-opened. This means that the money needs to be found through redeploying and reprioritising spending under the heading 1A (competitiveness for growth and employment) of the EU budget. The Commission has proposed reconsidering headings 2 (agriculture) and 5 (administration), which some delegations are not happy with.

Therefore, the Council asked the Commission to re-examine its proposal and present other alternatives for redeploying the heading 1A before final decisions on the EU’s 2008 budget are taken in the annual budget council on 23 November 2007.

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