EU Proposes Bailout of Galileo Sat Nav Project

Galileo, once billed as a potential rival to the US Department of Defense's GPS system, is now facing serious issues following disagreements over the development of the system by eight companies tasked with its build-out. However, the European Commission is proposing to shift money in the bloc's 2007-2013 budget to come up with extra funds to ensure its completion. Public funds were initially supposed to cover about one-third of the cost, said to be around 3.5 billion euros.

EU officials say the additional money -- some 2.4 billion euros -- will come from unspent money elsewhere. They are making the case by saying that the Galileo project is a strategic necessity, and would lessen the dependence on the US GPS system. The EU's positioning system would improve coverage in higher latitudes, and be interoperable with the GPS system through a recently announced deal. Member countries will still need to approve the bailout before it can proceed, however.

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