EU prevents UK threat to block Galileo procurement

UK fighting for access to Galileo’s highly encrypted service after Brexit

Brussels considers rebadging Galileo’s supervisory body

The EU has neutralised a UK threat to obstruct procurement of new satellites for its €10bn Galileo navigation system, the focus of a bitter row between London and Brussels over access to its military grade service.

The European Space Agency is expected on June 13 to give the go-ahead to procuring the next batch of satellites after Brussels agreed to assume all liabilities that ESA would normally incur by taking on the contract, according to several European and UK officials close to the subject. This means the agency does not need a unanimous vote to press ahead with the Galileo programme, but only a simple majority.

The EU’s tactical manoeuvre means that there is no longer a need to discuss a three-month freeze on Galileo procurement, a key demand from the UK in its Brexit negotiations.

Space agency in delicate position

The bloc’s decision to take on procurement liabilities also highlights the delicate position of ESA as Brussels and London manoeuvre for advantage in the battle over UK access to sensitive elements of EU-funded space programmes after Brexit.

In a space policy document later this week the EU will reveal it is pushing for changes to governance of the agency to prevent non-EU members from obstructing its space programmes.

ESA is independent of the EU but acts as the union’s procurement body for space programmes. Its 22 founding member states include the UK, which will continue to be an ESA member after Brexit.

The UK had threatened to use its veto on ESA’s council to delay procurement of the satellites in a bid to force Brussels to the negotiating table over UK access to the highly encrypted service that Galileo will provide alongside its open signal.

Under EU rules only member states can access or work on the sensitive Public Regulated Service, which is designed for government and military users.

UK companies, which have developed much of the security around the PRS signal, are being barred from bidding for new contracts unless they promise that all work will be transferred to EU countries before Brexit.

Britain wants security access after Brexit

The European Commission’s firm stance on access has angered Britain’s defence ministry, which is adamant it needs not only the access that would come with a security and defence agreement, but also oversight of the source codes to ensure security. The UK government is also keen to retain the expertise that has been built up by British companies in the encryption technology.

Britain’s threat to veto ESA procurement has already delayed the tender for the next batch of satellites by at least two months. While the vote is scheduled for next week, it could still be postponed again, although UK officials admitted that it was likely to go ahead, but Britain would still vote against it.

A second threat from the UK to sabotage progress on Galileo by withholding security clearance to British companies cannot be used for the satellite procurement, according to people with knowledge of the subject, because it can only be invoked when the contract is about to be signed, which is expected after the Britain leaves the EU in March 2019.

The withholding of security clearance was intended to block the transfer of technology from CGI UK, the UK-based company that is responsible for the encryption security on PRS, to Franco-Italian Thales Alenia Espace.

However, the contract between the two companies has been extended for a month, according to one person close to the subject, while UK and Brussels negotiate over Galileo access.

Brussels may rebadge supervisory body

A separate debate over ESA could emerge this week as the EU prepares to publish its space policy document, in which it will rebadge GSA, the supervisory body for Galileo, as the EU Agency for the Space Programme.

EU officials insist this will not change the responsibilities of ESA as the union’s procurement agency, but some fear the rebadging could eventually pave the way for a rival agency.

In a draft of the document seen by the Financial Times, the EU’s discontent with ESA’s governance is made clear.

It states that ESA’s decision-making procedures “cannot lead to a call into question of the decisions of the commission or the European Space Agency within the framework of the actions and space programmes of the union”.

The UK Space Agency said that the UK remained committed to “a strong, collaborative and independent European Space Agency”.

“We host much of Europe’s cutting-edge space capabilities and are playing a major role in EU space programmes such as Galileo,” it said. “The government wants this to continue, provided the UK and its industry can take part on a fair and open basis.”