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EU Funds New Navigation System - 2002-03-26

European transportation ministers have reached a deal to fund the launch of a $3 billion satellite navigation system called Galileo that will rival the U.S. Global Positioning System (GPS). The ministers overcame concerns about the project's cost, which had prevented Galileo from getting off the ground.

It was a happy day for the European Commission, the EU's executive body, which had long lobbied for the project's approval.

Leaders of the 15-nation European Union agreed to give Galileo the green light earlier this month at a summit in Barcelona.

The ministers' release of nearly $400 million, plus nearly $600 million already committed by the European Union and the European Space Agency, will provide Galileo with about one-third of the funds it needs in the development stage.

The ministers' decision will also please French, Italian and Spanish aeronautical and electronics firms that want to participate in the project, which is scheduled to become operational in the year 2008.

Galileo's future had been in doubt after Britain, Germany, and the Netherlands refused to approve money for the project, saying it would fail to attract the $2 billion in private investment needed to make it operational. But those countries and Austria, Denmark and Sweden have apparently decided that Galileo makes economic sense.

Space scientist Andrew Coates of University College in London says Galileo will be more accurate and focused than GPS. But that is not the only reason he thinks Europe needs the project, "like keeping the European aerospace industry going," he said. "There is the service provision. It has been estimated that, for the cost of the system, one will get back about four times the cost. There is also the worry about European autonomy in space."

French transportation minister Jean-Claude Gayssot issued a statement saying Galileo will allow the European Union to shake off its dependence on the American GPS network, which is controlled by the Defense Department. Galileo backers say the project is vital if the EU high-technology industry is to remain competitive with that of the United States. The European Commission says it expects Galileo to create more than 100,000 jobs.

Although the United States has opposed the development of Galileo, calling it unnecessary, U.S. officials say they want to cooperate with the European Union to insure that the project is compatible with GPS and benefits users worldwide.