The German EU Council Presidency wishes to reduce the autonomy of the European Commission in monitoring the protection of essential security interests under Article 25 of the regulation establishing the EU space programme, while keeping the space sector open to international competition, according to a compromise proposal obtained by EUROPE on Friday, 28 August.
Article 25 is designed to protect the interests of the Member States and the Union against any influence from non-Member States. For this reason, negotiations on this Article (as well as on Article 7 on non-Member States and international organisations associated with the programme and Article 8 on access to the SST, GovSatCom and PRS programmes by non-Member States or international organisations) had been frozen while the United Kingdom was sitting at the negotiating table in the EU Council (see EUROPE 12214/24).
In its proposal of 25 August, which will be discussed by the Space Working Group on Tuesday 1 September, the German Presidency suggests (Article 25, §1) that the Commission “shall propose” the conditions of eligibility and participation required for contracts, subsidies or prizes within the scope of the space programme. In its initial legislative proposal, the Commission proposed that it shall set the conditions of eligibility itself.
Additionally, the German Presidency is adding a new paragraph according to which the national security authorities where the legal entity is established will have to assess whether the legal entity complies with the safeguards laid down in the regulation, and not the Commission itself.
Moreover, Germany is introducing the concept of “competitiveness” in industrial supply, as well as compliance with the “principles of an open economy” (Article 1, recital 37).
Attempt to re-nationalise competencies
“Germany is breaking down all the barriers set by the European Commission”, one source said. According to this source, what the Presidency is proposing constitutes “placing the European Commission under supervision” and “pure and simple sabotage of the objective pursued by the Commission with this article”.
“At first, the European Commission, in its initial proposal, had written Article 25 in such a way that only it could exclude certain entities from providing industrial supplies”, the source explains.
“Now, in the German proposal, when the European Commission judges that there is a security problem, it can no longer do this alone. It must say to the Member States: ‘Hey, there's a security problem here’”, the source continues. “So, there is already a negotiation between Member States to determine whether a problem involves security or not. So, by definition, it weakens the original intention”.
As for the introduction of the notion of “competitiveness”, this source explains that it will therefore be possible to use Article 25 to purchase components on the international market (Chinese or American) on the grounds that they are more competitive than those produced on European soil.
The same applies to the national monitoring of an entity’s compliance with security criteria. This provision would introduce the risk of competition between Member States, which, in order to allow an entity to set up on its territory, might be tempted to be less observant when issuing the authorisation. This authorisation makes it possible to prove that an entity established on European territory is free of any influence from non-Member States.
Similarly, according to this source, respect for the principles of open economy is a mistake: no power in the world applies this principle to its space sector.
These new provisions would have different impacts in different space sectors, with the French space sector exposed to international competition whereas the German sector is much less so. Maintaining this openness would increase pressure on the French space industry, according to a source.
Derogation arrangements for the United Kingdom
Another oddity: in its compromise proposal on Article 7 (§2a), also obtained by EUROPE, Germany introduced the possibility for non-Member States, which have long participated in European space programmes (Copernicus and Galileo), to continue their participation. This addition was tailor-made for the United Kingdom, our source estimates.
France, Belgium, and Italy are reportedly reluctant to accept the German proposals. Sweden and the Netherlands would rather remain in line with the Germans.
To see the Presidency’s compromise proposal on Article 25: https://bit.ly/3gGGeVA
To access the compromise proposals on Articles 7 and 8: https://bit.ly/3hDSQya (Original version in French by Pascal Hansens)