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Italy and Germany make step towards Galileo satellite navigation programme financing resolution

The European Union member-state impasse over the financing of their troubled Galileo satellite navigation programme could be overcome with the help of the first German-Italian framework agreement for co-operation in space that commits them to seek a common European initiative built on communications, satellite navigation and Earth observation. The aim is to achieve EU independence in these matters while maintaining co-operation with the US and Russia.

National government interference in the selection process for Galileo's operator saw a competitive, two-consortium bidding process collapse into a doomed workshare squabble between companies within the politically forced merged consortium of the original rival industrial groups. The outcome of the fiasco was a delay in the development and deployment of the 30-satellite navigation constellation from before the end of this decade to the start of the next and a need to find the €2.4 billion ($3.55 billion) the private sector would have invested in the €3 billion-plus programme, if the public-private partnership arrangement had not been dropped.

The German-Italian framework represents an attempt to find agreement for a new financial structure and the EU has given itself a December deadline for finding a solution.

Significantly, the agreement's signing ceremony, held at the 20 November German-Italian summit at Meseberg, near Berlin, was not only attended by the two countries' heads of government - Germany's Chancellor Angela Merkel and Italian prime minister Romano Prodi - and their aerospace and space agency chiefs, but also the respective countries' transport ministers, who are the key government figures involved in Galileo negotiations.

With the heart of Galileo's financing problem being a perceived inequality in workshare between the project's primary backers - Germany, France and Italy - the new co-operation agreement's significance is also indicated by Italian space agency president Giovanni Bignami's statement that the agreement means the, "[space industry] relationship triangle with Germany and France is now perfectly equilateral".

According to a senior Italian government agency source: "Germany was afraid the industrial structure of the French and Italian industrial partners in Galileo, with the close ties between Thales and Finmeccanica, could jeopardise its hopes to secure a substantial workshare."

The source added that the impasse with Germany stemmed from the German government wanting at least 50% of Galileo's financing to be through the European Space Agency, believing this solution favoured its companies, while Italy was promoting an all-EU financing approach.

To cover the lost €2.4 billion, this would add at least €400 million a year to the EU's Galileo spend. The navigation programme's first test satellite was put into orbit in December 2005 and the second is to be launched in March 2008.




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