Brussels, 01/06/2007 (Agence Europe) - It is unlikely an agreement will be reached by member states on the method of financing Galileo during the next Transport Council to meet on 7 and 8 June in Luxembourg. Examining the different scenarios of public financing on Friday, Coreper discarded the idea of drafting a resolution to be adopted by transport ministers. It replaced this with conclusions which will support the Commission's proposal recommending public financing of the construction phase of the project, but which will not reach a definitive decision in favour of Community funding for the project. Some Member States in fact prefer financing through national contributions through a fund created by the European Space Agency (ESA) or through EIB support.
Further to the stalled talks with the private consortium grouping 8 companies (EADS, Alcatel-Lucent, TeleOp, Finmeccanica, Hispasat, Immarset, Thales, Alena) and in line with the mandate that was granted to it by the Council in March, the vice-president of the Commission responsible for transport, Jacques Barrot, suggested on 10 May that the construction phase of the European satellite navigation system should be funded with public money (see EUROPE 9424). Two scenarios are to be put to Council decision on 8 June this year, so that the public sector may find the €2.4 billion required to carry out the project whose financing, according to the previous scenario, was to be two-thirds covered by the private consortium. The first scenario suggested exclusively Community funding through modifications to the line 1A ceiling of the Community budget, which would require revision of the financial perspectives for 2007-2013 and the growth of resources available under this chapter from financial commitments not used by member states. Every year, between €3 and 10 billion - the difference between commitment appropriations (amounts foreseen for projects) and payment appropriations (amounts really paid) - remain available. According to sources close to the Commission, these resources may prove insufficient. The problem is therefore to determine where the money can be found, say other diplomatic sources, evoking as one of the possible solutions the use of EIB financial support. The second scenario foreseen by the Commission provided for funding by member state contributions, a formula that is rejected by the European Parliament, among others. The Commission's preference also goes to Community funding (see EUROPE 9424 and 9433), considered the only solution possible for accelerating deployment of the system without having an impact on taxpayers. Some countries - such as Germany, the Netherlands and the United Kingdom - which ,according to Reuters, have pinned great hope on the impact that the project will have on the industrial sector, fear a rise in the Community budget. They are therefore opting for financing based on national contributions. According to the European press, which evokes Commission sources, it is unlikely that a compromise will be found until autumn 2007 and until confidence is restored between France and Germany following their dispute over the EADS dossier. “Once confidence has been restored between France and Germany, things will move fast”, a Commission source cited by Reuters said. (aby)