Ministers from the European Space Agency’s member states have their work cut out for them at their Dec. 1-2 conference in Luxembourg intended to determine the agency’s direction in the upcoming years and resolve several outstanding issues, including launcher strategy.

The days leading up to the meeting brought signals from Germany that it had settled its seemingly intractable differences with France over launcher strategy, apparently acquiescing to the latter’s desire to forgo an Ariane 5 upgrade and proceed directly to an Ariane 6 rocket. But that very positive news was offset by Italy’s subsequent acknowledgment that it might not have as much funding as expected for ESA programs over the next couple of years.

This will necessarily affect the launcher negotiations as well as other key programs on the meeting agenda, including the ESA participation in the international space station beyond 2015, funding for the two-launch ExoMars mission and upgrades to the Vega small launcher. The Italian Space Agency, or ASI, has a key role in station and is leading the ExoMars and Vega projects.

ASI also is keen on pursuing a second-generation Cosmo-SkyMed radar satellite constellation, which is a domestic Italian program but will nonetheless draw funds that otherwise might go toward ESA activities.

ASI President Roberto Battiston says the compromise on Ariane 6 remains intact and that Italy is determined to see ExoMars through despite a still looming shortfall of 200 million euros ($250 million). But he acknowledged that the size of Italy’s future contribution to the space station, a top German priority, is still in question.

That presents a bit of a problem given that ESA’s formal commitment to space station operations is set to expire at the end of 2015. NASA had hoped that the meeting would produce an agreement to extend ESA participation to 2020, but the Europeans have signaled that a commitment through 2017 is more realistic for now.

Nonetheless, ESA recently signed a contract with Airbus Defence and Space for the service module for NASA’s initial Orion deep-space crew capsule, a deal that fulfills its station obligations for the next several years. The question now becomes how much funding ESA will have for station utilization.

Germany has been insisting that ASI restore its traditional 19 percent contribution to ESA’s space station budget starting next year. ASI’s contribution had dropped considerably in 2012 due to Italy’s financial problems. Whether Germany can impose its will on Italy, or persuade other ESA members to pick up the slack, however, remains to be seen.

ESA has survived previous ministerial showdowns with minimal bloodletting through a combination of creative financing schemes and by deferring the toughest decisions. The upcoming meeting promises to tax the accounting and negotiating skills of the ministers to the fullest.