The Galileo satellite navigation system is the European civil alternative to the US Global Positioning System (GPS) and the Russian GLONASS, both funded and controlled by military authorities.

Satellite radio navigation is a leading-edge technology which allows anyone with a receiver to determine their position very accurately at any time by picking up signals emitted by several satellites. Currently, this technology is dominated by the United States with its Global Positioning System (GPS) and by Russia with its GLONASS system. Both of these systems are financed and controlled by the military. 

The Commission presented, in February 1999, its plans for a European satellite navigation system, Galileo, based on a constellation of 30 satellites. Contrary to its American and Russian counterparts Galileo is designed specifically for civilian and commercial purposes - controlled by civil management. 

Initial plans foresaw a four-phase development procedure, funded both by public subsidies and the private sector. The system was supposed to be commercially operational and exploitable by 2008. However, the eight companies of the winning Galileo 
Eurely/iNavSat consortium
(AENA, Alcatel, EADS, Finmeccanica, Hispasat, Inmarsat, TeleOp and Thales) were unable to get a single Galileo operating company structure in place and a chief executive appointed. 

According to the Commission, the concession contract negotiations failed due to disagreement over the location of major Galileo installations, the roles of the respective industries, the internal repartition of work shares and the principle of geographical and/or equity returns as well as "a misjudgement that market-risk could be transferred to the private sector, the technical complexity of the programme, and insufficiently strong or clear public governance". 

In May 2007 the companies backed off from their engagement, arguing that they would need to bear the most of the financial risk without any clear guarantees of a return on their investment. 

With the project already facing serious delays, the Commission tabled, on 16 May 2007, a series of alternatives to the originally planned public-private partnership in a drive to salvage the project and finance the construction of Galileo infrastructure to guarantee the EU's strategic autonomy (see EURACTIV 18/05/2007). The EU executive clearly stated that it favoured an option which consisted of full public-sector financing of 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 was backed by the European Parliament and a majority of the EU 27, as it was said to help avoid a situation whereby some member states would contribute more, making Galileo vulnerable to the principle of juste retour (a proportional return on investment).

In late November 2007, the Council voted in support of financing Galileo entirely from Community funds (some €3.4 billion) and backed a Commission proposal on the industrial tendering process for the project (see EURACTIV 30/11/2007). Some of the key principles of the industrial plan, which aims to "guarantee competition and transparency" and make sure that all European aerospace industries can participate in the project, are:

  • Identifying a sufficient number of segments subject to a tendering process to guarantee enough competition [to avoid domination by one company]: at least six different segments have been identified; 
  • rules on 'non-accumulation': in the tendering process, the prime contractor can only be so in two of the segments, not more; 
  • sub-contracting: the prime contractor would have to subcontract a large share (around 40%) to other companies that are not winners of the bid. 

The path for the EU's satellite navigation system to become operational by 2013 was finally cleared after member states agreed in April 2008 on the Galileo Implementation Regulation outlining a timetable and industrial tendering plan as well as a clear division of roles and responsibilities between the three EU institutions (see EURACTIV 08/08/2008). 

According to the compromise, the Galileo programme development and deployment phase comprising the construction and launch of the first satellites and the establishment of the first ground-based infrastructure is to begin in 2008 and end in 2013. The exploitation phase - management, maintenance, standardisation and marketing of the system - should begin at the latest in 2013 when the system is expected to become operational. 

The deployment phase will be financed entirely by Community funds, but public-private partnerships or other forms of contract could be formed with the private sector after 2013. 

Galileo's applications and business opportunities

Galileo will provide information concerning the positioning of users in many sectors such as transport (vehicle location, route searching, speed control, guidance systems, etc.), social services (e.g. aid for the disabled or elderly), the justice system and customs services (location of suspects, border controls), public works (geographical information systems), search and rescue systems or leisure (direction finding at sea or in the mountains, etc.). 

In the transport field, it is expected to considerably improve air traffic control, the management of ship and lorry fleets, road and rail traffic monitoring, the mobilisation of emergency services and the tracking of goods carried by multimodal transport.

Galileo and its spin-offs are expected to create a huge market for equipment and services for the private sector. However, it is not exactly clear how this will be done as the American GPS is already available free of charge, whereas the customers are expected to be ready to pay for a Galileo signal. 

Civilian/military use of Galileo

For the present, Galileo will not be used for military purposes but it could have ramifications for Europe's security and defence institutions, enabling users to locate individual land mines or direct missiles.

Galileo will offer several service levels, from open access to restricted access of various levels:

  • An open, free basic service, mainly involving applications for the general public and services of general interest. This service is comparable to that provided by civilian GPS, which is cost-free for these applications, but with improved quality and reliability;
  • a commercial service facilitating the development of professional applications;
  • a "vital" service (Safety of Life Service) of a very high quality and integrity for safety-critical applications, such as aviation and shipping;
  • a search and rescue service that will greatly improve existing relief and rescue services; and; 
  • a public-regulated service (PRS), encrypted and resistant to jamming and interference, reserved principally for the public authorities responsible for civil protection, national security and law enforcement which demand a high level of continuity. It could prove to be an important tool in improving the instruments used by the European Union to combat illegal exports and illegal immigration.

The services offered by Galileo will cover the whole planet, including areas at a geographical disadvantage and the outermost regions of the European Union.

Galileo co-operation with the American GPS and third countries

Several countries around the world have already signed a co-operation agreement with the Galileo programme. The EU and the United States have also signed (June 2004) an agreement  to ensure compatibility between their rival satellite positioning systems. The deal means the two sides will agree common operating standards for the American Global Positioning System (GPS) and the European Galileo project. 

It determines how Galileo's frequencies should be structured, which will allow signals to be jammed in war zones if necessary. The agreement will create a world standard for signals, which means that users will be able to obtain signals from both systems. 

In July 2007 the EU and the US agreed on the use of a common GPS-Galileo signal after a joint EU-US compatibility and interoperability working group overcame technical challenges to design an interoperable GPS-Galileo civil signal. 

"We are now going to move on with the implementation phase and put an end to the period of disturbances that has accompanied this process in recent times," said the Portuguese Minister for Transport Mário Lino after the Council agreed on the industrial tendering plan for Galileo at the end of November 2007.

"The industrial plan has been very difficult to implement because we had to reconcile a necessary measure of competition and a desire for fair allocation of the construction work on Galileo. So in dividing the programme up into six packages, imposing sub-contracting, we have maintained competition so that all the aerospace industries in Europe can participate," added Commission Vice-President Jacques Barrot

"Galileo is perfectly in line with the Lisbon growth strategy. It is the largest industrial project ever organised on a European scale, the first European public-private partnership, the first European public infrastructure. The project will generate jobs as well as innovation and improvement for European citizens," added Barrot. He also said: "We cannot let Europe lose its independence in this strategic sector," highlighting Galileo's importance for Europe's strategic autonomy as he argued for a political decision on the project to be made urgently.

However, as a diplomat from an EU member state put it, "everybody knows that there is no business case for Galileo. We only need a European system of our own, because at a militarily very critical moment we can't trust the GPS to be available."

"Parliament's absolute priority in these negotiations was Galileo, as it is of huge political and technological importance for Europe. In the future, Europe will not be dependent on American, Russian or Chinese systems as it will have a system of its own," said MEP Kyösti Virrankoski, Parliament's 2008 budget rapporteur

The United States had initially opposed the system, citing it would duplicate and compete with the Pentagon's GPS. It has tried to show that there is no need for an alternative system by making GPS more widely available and improving the precision of the public service. However, faced with strong determination from the EU, the US agreed to negotiate an agreement to make GPS and Galileo compatible so that users could use both systems with the same receivers. 

Ralph Braibanti, from the US State Department, said: "Through a lot of hard work and goodwill on both sides, we have succeeded in converting issues that could have driven a wedge between the United States and Europe into a situation where satellite navigation now clearly appears to be an area that is going to add to the strength of the transatlantic partnership."

  • 22 March 2007: the Council sent the Galileo consortium partners an ultimatum to solve their internal disputes and sign a consortium contract by 10 May 2007. If no progress had been made by that date, the Commission would examine alternatives for the public-private-partnership. 
  • 16 May 2007: the Commission tabled a Communication on alternative scenarios for putting Galileo in place.
  • 8 June 2007: the Council asked the Commission to submit by September 2007 "detailed alternative proposals for the financing, including all possible options of public funding, based on additional thorough assessments of costs, risks, revenues and timetables".  
  • 6 Sep. 2007: the Commission published a cancellation of its call for tenders for a concession for the deployment and operation phases of the Galileo programme.
  • 19 Sep. 2007: the Commission adopted a communication on the future of Galileo and proposed a revision of the EU's long-term budget to allow funding of Galileo entirely from Community funds. 
  • 23 Nov. 2007: 2008 Budget Council decided upon the financing of Galileo.
  • 29 Nov. 2007Transport Council reached an agreement on industrial tendering plan for Galileo. 
  • 7 April 2008: the EU-27 ministers of transport agreed on the Galileo Implementation Regulation.  
  • 23 April 2008: the Parliament gave its official backing to the ministerial agreement by 607 votes in favour with 36 votes against and 8 abstentions [see background].
  • 27 April 2008GIOVE-B, the second Galileo experimental satellite will be launched. After, four of the 30 Galileo satellites should be launched to validate the functioning of space and related ground infrastructure. 

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