Exclusive: Galileo eats into EU budgets

Up in the air: the Galileo project

Around €300 million looks set to be slashed from the European Union’s 2008 research and development budget, and re-channelled into the flagship Galileo satellite project, according to people preparing for a meeting of national budget ministers on Friday.

Last month heads of state and government from the 27 countries reiterated their political commitment to the Galileo project, which aims to launch 30 satellites into space to provide a more accurate and reliable equivalent to the US’s geo-positioning system (GPS).

Earlier this week finance ministers from the 27 EU countries agreed unanimously that the overall EU budget for the next seven years should not be expanded in order to cover Galileo.

Instead they proposed that funds be diverted from other R&D projects. The European Commission, the EU’s executive body, is drawing up a broad plan for how to do this. Its report will be published in September.

But in the meantime, budget ministers have to push ahead with next year’s budget plans. According to two diplomats following the discussions for their countries, most national governments want to re-direct around €300 million that has already been allocated to other R&D projects.

One idea is to reduce the budget for a range of projects by a small percentage, rather than axe any one project altogether, according to one diplomat, on the usual condition of anonymity. Another plan is to take the money from the budget for trans-European infrastructure networks, which comes out of the same part of the overall budget as R&D spending.

“Most member states want to take this money from the section of the budget which is mainly dedicated to R&D,” the diplomat said.

Others, mostly from northern Europe, would rather that the additional funds come from the budget for agriculture or structural funds but they are in a minority, the diplomat said.

The national governments don’t only have to agree budget matters among themselves, they also have to agree with the European Parliament, which has already demanded that the overall budget be expanded.

Reimer Boege, chairman of the Parliament’s budget committee is furious about the plan to redirect funds from other projects to Galileo, according to people close to him. He will fight to retain next year’s R&D budget as it was originally agreed. Borge wasn’t immediately contactable.

“There’s no justifiable reason for cutting the budget. It would look like we are robbing Peter to pay Paul,” said one person from the Commission who shares Boege’s opposition to the budget change under consideration, and who insisted on remaining anonymous.

The €300 million figure is close to the €308 million sum allocated to the launch of the European Institute of Technology, the brainchild of Commission president Jose Manuel Barroso. The Commission official said this is “pure coincidence.”