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Germany declares satellite wars

The German government threatened to use all means short of warfare to stop France gaining control over Europe’s £2billion Galileo satellite venture, the EU’s grandest industrial project to date. A rival to America’s GPS, Galileo is designed to break strategic dependence on the United States and propel Europe into the lead in space technology.

Launching 30 satellites into orbit by 2008, the network offers pinpoint accuracy for mobile telephones, air traffic control, maritime navigation, and a host of different uses – ultimately including EU defence.

But the scheme has been hamstrung by infighting between the French and Germans, the latest case of corporate friction that belies the cosy political rhetoric of the two countries’ leaders.

Berlin is backing a bid by iNavSat, a consortium of the EADS aerospace group, Britain’s Inmarsat and France’s Thales defence group, which would ensure a strong German element in the contracts. France is pushing for a joint venture combining iNavSat with Eurely, made up of France’s Alcatel, Italy’s Finmeccanica, and Spain’s Hispasat. This bid would make France the dominant player.

Manfred Stolpe, the German transport minister, said that the joint venture was totally unacceptable. “We will use every peaceful means at our disposal to stop this. We must make sure that enough of Galileo’s industrial spill-over comes back to Germany,” he said.

The start-up costs are partly funded by the European Commission and the European Space Agency, leaving German taxpayers bearing the heaviest burden. The EU transport commissioner, France’s Jacques Barrot, has so far withheld funding for the next phase of the project, pushing behind the scenes for the French plan.

The European Commission claims that Galileo will generate £7billion in annual business from 2008, creating up to 150,000 jobs. Britain has long been sceptical, suspecting that it is an uncosted exercise in empire-building – or “the Common Agricultural Policy in the sky” according to one official.

America already offers the GPS system free to civilian users worldwide, making it unclear where the jumbo profits will come from. Brussels insists that Galileo is more accurate, vastly increasing the range of commercial uses. It also warns that GPS can be switched off by the US Defence Department at any time, or used as a tool of political pressure – reducing Europe to “vassal status” in the words of French President Jacques Chirac.