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21st Jul 2019

EU approves extra funds for Galileo and technology institute

EU ministers have agreed to full public financing of the Galileo satellite system and a brand new technology institute, as part of a deal on the bloc's 2008 budget - the first ever to earmark more cash for growth and jobs than for farm aid.

After months of disagreement over who should foot the bill for the two big projects – private sector co-financing was originally the plan - member states agreed late Friday (23 November) to push forward with them using funds solely from EU coffers.

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  • The EU has agreed to pay extra cash for the two big projects, which failed to attract private investors (Photo: European Commission)

Galileo, the 30-satellite navigation system designed to rival the US global positioning system (GPS) will receive an extra €2.4 billion than originally planned. Some €1.6 billion will come from unspent farm subsidies, which would otherwise have headed back to national capitals.

Germany, as the biggest contributor to the EU budget, had strongly opposed this scenario fearing it would set a precedent for not giving unspent farm money back to national capitals, despite a declaration that it is to be an "exceptional measure."

"It's a question of budget discipline," the country's spokesman said, explaining Germany's decision to vote against the deal.

The plan to kickstart the satellite system with an extra financial injection from public money was proposed by the European Commission in June, after a private consortium of companies failed to agree on the details of their investment in the initial phase of its construction.

A similar fate occurred to the European Institute of Technology (EIT), another flagship project of the commission under Jose Manuel Barroso. It also failed to attract enough interest among private investors and needs to be supported by EU tax payers.

The finance ministers gave the green light to an extra €309 million from various existing budgetary chapters to enable the new body to start organising the first three technology projects in its portfolio during 2008.

Mr Barroso warmly welcomed Friday's budgetary deal as proof of the bloc's orientation towards growth and jobs, maintaining that the two projects "will foster innovation, technological progress and competitiveness across the whole EU."

"This is a budget for a Europe of results," Mr Barroso added. Meanwhile, budget commissioner Dalia Grybauskaite repeated throughout the negotiations that the 2008 budget is "historic" as it puts aside more money for economic goals than for the common agriculture policy.

Altogether, the EU plans to spend €120.3 billion next year which represents 0.96 percent of the bloc's gross national income.

The 2008 budget also includes €285.3 million earmarked for foreign policy and security operations, including planned police and administrative missions in Kosovo when the EU replaces the UN in Serbia's province.

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