Commission warning 'rings alarm bell' for consequences of Galileo failure

Brussels, 14 March 2002

Europe's high-tech industries and millions of euro of economic benefits are at risk unless the Galileo satellite navigation system is given the go-ahead at the European Transport Council later this month, according to a statement issued by the European Commission's Transport and Energy DG on 12 March.

'It is crucial for Europe and the world as a whole to have a choice and not to remain dependent on the current monopoly of the American GPS system which is less advanced, less efficient and less reliable,' the document says, adding that 'the Commission is not ringing the alarm bell without good reason.'

It states that 'Galileo is not expensive,' and that the investment required is less than the cost of building the new airport terminal at Heathrow and equal to the cost of 150 km of semi-urban motorway. It adds that funding for Galileo 'will be entirely covered by the EU budget,' and Member States will not have to fork out from their national budgets.

The Commission says that Galileo is vital for the future of European high-tech industries and that the loss of the project - 'an essential technological advance in the context of tomorrow's world competition' - would have a serious knock-on effect on EU competitiveness and employment. 'While the cost of establishing Galileo represents some 3.2 to 3.4 billion euro,' says the Commission, 'the cost of abandoning the project is immense. Considering only the economic implications, 100,000 new jobs and an equipment and services market of some 10 billion euro per annum by 2010 are at stake.'

It adds that 'the development prospects are enormous; as with the microcomputer 20 years ago or the Internet 10 years ago, it is highly likely that at the moment we can only see the tip of the iceberg.' Without Galileo, the Commission warns that the development and even the survival of European new technology sectors would be under very serious threat.

The Commission also highlights that the Galileo system would not benefit Europe alone, emphasising that 'the EU has clearly stated that it is willing to involve interested non-Member countries in the research, development and industrial commissioning work of the Galileo project.'

The Commission's statement repudiates US claims that the Galileo system is unnecessary, and says the US argument that GPS is free while Galileo will charge for its services 'does not hold water' as Galileo will be free for basic applications and charge only for applications of a high service level which GPS cannot itself provide. The Commission says that 'the United States, which preaches the gospel of free competition, is doing its utmost to avoid competition since it may lose its dominant position.'

In addition, the document outlines a number of shortcomings of the US system. The accuracy of GPS is at times as low as several dozen metres, coverage and penetration can be unreliable and 'the predominantly military character of GPS means that there is always a risk of civilian users being cut off in the event of a crisis' with potentially disastrous consequences. The document points to 'a total absence of guarantee and responsibility' in GPS, adding that the GPS III project to upgrade the American system will not resolve all of its shortcomings.

'For these reasons, among others, the EU wishes to develop, with Galileo, a system over which it has control, and which meets the need for accuracy, reliability and security,' the document states. It argues that Galileo offers superior and constant accuracy and genuine continuity of public service.

There is also an urgent call for a final decision on the launch of the Galileo project to be made no later than the meeting of EU Transport Council on 25 March in order to meet 'pressing timetable constraints.' Unless the first operational satellites are launched before 13 February 2006, the radio frequencies needed for Galileo will be lost. In addition, private companies, which have mobilised teams of engineers for the preliminary definition phase, may have to dissolve them for lack of funding. A study on the financial viability of the Galileo project carried out by PriceWaterhouseCoopers also stresses that the system must come into operation in 2008 in order to take up the market shares available before the possible arrival of the upgraded American GPS III.

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CORDIS RTD-NEWS/© European Communities, 2001