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EU fails to agree on salvaging satellite navigation system

European governments failed to agree on Friday on how to salvage their troubled satellite navigation system, Galileo, adding to doubts about their ability to continue to finance "grand European projects" like the European rival to the US' Global Positioning System.

The transport ministers from the 27 EU governments, meeting in Luxemburg, scrapped the original public-private financing plan for the satellite project but postponed a decision on how to come up with US$3.2 billion to keep the project afloat.

Regardless of the outcome, Galileo's difficulties could prompt Europe to think again before embarking on prestige projects that require satisfying disparate government and corporate interests.

Standing to gain from a loss of Galileo could be the European Defense Agency (EDA), which constitutes a lower-profile effort to help coordinate pan-European military spending and open military contracts in each European country to companies in other countries.

"The EDA is in a very different position," its chief executive, Nick Witney, said. "Given the constraints to defense budgets, we have focused on trying to encourage relatively small-scale collaboration between our member states, focusing on key technology and subsystems which will be the building blocks towards improved defense capabilities."

In contrast, the future of Galileo looks far from certain. The European Commission will put together a new financing proposal and, though most countries favor a bailout by taxpayers, several are reticent.
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