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Europe's Earth Observation Program GMES at Stake

bridges, vol. 33, May 2012 / Letter from Brussels

By Christian Eisner

 

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Christian EisnerIn Europe, space policy is principally based on the contributions by three main actors: the European Space Agency (ESA), the European Union (EU), and the national states. The aim of developing a common EU Space Policy (ESP) building upon achievements by ESA and the Member States was initiated in 2004, when ESA and the European Community concluded an agreement that provided a formal political framework for cooperation. In accordance with several Resolutions adopted by the "Space Council" – concomitant meetings of the Council of the EU and the ESA Council at the Ministerial Level – two flagship programs have been defined so far. Adding to EGNOS and Galileo, well-known European activities in the field of satellite navigation,1 the European Earth Monitoring Program (GMES)2 will constitute the second pillar of the envisaged user-oriented ESP.

GMES is an Earth-monitoring program and will ensure Europe's contribution to the global GEOSS3 initiative. The program is led by the EU, the technical components will be carried out by ESA, and contributing missions by Member States will complement the program. GMES will establish capacities and enable access to data for monitoring the land, the atmosphere, the marine environment, and climate change. Furthermore, GMES will provide support in the fields of emergency management and security, and will offer information services especially designed to meet users' needs. The program will also serve policy makers from international to regional levels and will integrate well into the EUROPE 2020 Strategy and many other Union policies, including promotion of Europe's competitiveness.4

In order to allow implementation of first services for users, the GMES program moved from development to the beginning of its operational phase in 2010. The Land Monitoring service and the Emergency Response service are already operational and the first three Sentinel satellite missions will be prepared to launch in 2013. The Regulation on GMES and its initial operations5 made GMES an EU program and provided the legal basis for its financing from 2011 to 2013. By far the largest part of available funding for GMES, however, currently comes from the 7th Framework Programme for Research and Development and from ESA (the latter being responsible mainly for the space component, in particular the Sentinel satellite missions). In this way, EU and ESA will have spent a total of more than €3 billion by 2013. This amount will be supplemented by significant investments of Member States. To reflect the program's transition to its operational phase, these funding modalities will have to be adapted as of 2014, meaning a shift away from mainly research-based funding.


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Recent developments

In response to this situation, in May 2011 the Council of the EU reaffirmed its "strong commitment to the EU flagship programs GNSS (EGNOS and Galileo) and GMES," and stated that "both programs being European programs under EU responsibility should continue to be financed by the EU budget."6 This means that funding for the two ESP flagships should be part of the next Multiannual Financial Framework (MFF) which, generally speaking, will cover all expenditures of the EU for the period from 2014 to 2020.

To the surprise of all stakeholders, the Commission's proposal on the next MFF,7 as presented in June 2011, made a provision for GMES (as well as Europe's financial contribution to the International Thermonuclear Experimental Reactor, ITER) to be financed "outside the MFF." The political reason for this completely different approach was that large projects such as GALILEO and ITER had shown significant cost overruns in the past, necessitating costly and complex redeployments within the EU budget. The Commission concluded that the MFF does not provide an adequate framework for such large-scale projects. In times like these, when national states face major challenges due to difficult economic and financial conditions, negotiations on the next MFF are likely to be the toughest in decades; thus, the Commission wanted to avoid any necessity for redeploying funds during the next MFF period. However, GMES has not shown cost overruns in the past, and exceeding the budget is also unlikely to occur in the future since the flexible program structure permits reprioritization of objectives and components. On the other hand, GALILEO, a large-scale project that caused significant problems in the past and is now moving from development to operation, should remain within the MFF. According to the Commission's reasoning, the EU will be the sole owner of the infrastructure and foresees a sufficient budget for GALILEO's future needs.

In November the new concept for future funding of GMES was given a concrete shape when the Commission submitted an outline for an agreement between the Member States for creating a "GMES Fund."8 Carrying a total value of €5.8 billion, the fund should be borne by all 27 Member States, with individual amounts depending on their national GNIs. The establishment of this fund would require the conclusion of an intergovernmental agreement among all Member States, which could be joined by additional partners such as third countries, ESA, or the EU itself; the Commission would manage the fund. However, considering that, in general, the Treaty does not allow a measure resulting from the exercise of Union competence to be financed outside the EU's budget, the proposal appeared problematic. As a matter of fact, detailed legal analysis indicated that funding GMES outside the MFF might cause a breach of the principles of unity, transparency, and financial discipline as set out in the Treaty.

A threat to the future of GMES?

The conclusion was that when funding GMES outside the MFF, the only remaining option is to re-establish the program on international law outside the scope of the Treaty. This would mean a change of the program's legal basis, and would have unexpected implications. The negotiation of an international agreement covering the funding, the governance, etc., might take a long time. Termination of GMES as an EU program will definitely lead to substantial discussions on the future duties of the parties involved (especially the role of the Commission). Thereafter, as experience shows, the ratification procedures, which have to be carried out by 27 Member States in accordance with their national laws, are likely to last several years. This would cause delays and pose a significant risk to the most important objective at the moment: to ensure the sustainability of the program's operations and to provide services to the users beyond 2013.

However, the most dangerous consequence of the Commission's proposal is that there will be no obligation for Member States to agree on an international GMES Agreement. In other words, the Commission's proposal provides the opportunity to opt out. Member States for various reasons might take the opportunity to abandon their engagement in GMES. In the event that a "critical mass" of countries decided to opt out and left their financial burdens to be borne by the others, all 27 might back out of the program. This might well be the end of the program as we have known it.

Given this situation, the reaction of the Council and the Parliament on the Commission's proposal was abundantly clear. The Parliament in particular is showing outstanding interest in the issue, since it would lose its co-decision powers if GMES ceased to exist as an EU program. Hence, in September a letter signed by almost 50 Members of the European Parliament was sent to the President of the European Commission, José Manuel Barroso, asking him to reconsider the proposal. In January the Parliament urged the Commission to include financing for GMES in the next MFF,9 because the current proposal poses a serious threat to the future of the program. Just a few weeks later, the Parliament adopted a Resolution on the future of GMES,10 explicitly disagreeing with the idea of re-establishing GMES as a program outside Union law and calling on the Commission to speedily table a legislative proposal for the long-term governance, funding, and operation under the MFF.

On the part of the Council, several Member States addressed a letter to the Commissioners responsible and pointed out that the Commission's proposal is not acceptable. Thereafter, at the 8th meeting of the "Space Council" of EU and ESA last December, many ministers rejected the proposal with harsh words, leaving the Commission somewhat stunned since the topic of financing GMES was not even part of the agenda.

Unfortunately, at this point the Council has failed to adopt Conclusions clearly expressing its position. Indeed, the vast majority of Member States disagrees with the direction that the Commission indicated for future funding. A smaller group of Member States, however, is unwilling to agree on a common statement. Many of them are of the view that these discussions should be part of the overall negotiations on the MFF, and most actually do oppose the Commission's proposal. Although the Danish EU Presidency had prepared Council Conclusions in January, it soon appeared impossible to reach consensus on the text without taking out substantial parts, in particular those concerning future funding. The Presidency, therefore, decided to give the Member States an opportunity to discuss the future of GMES in the Council "Competitiveness" in February, with no adoption of Conclusions foreseen. The debate focused almost exclusively on financing issues, and the position of the Council once again was very clear: Again, a substantial majority opposed funding GMES outside the MFF, and only two Member States explicitly supported the Commission's proposal.

The way ahead

Until now, a great number of stakeholders involved in GMES – such as the European Parliament, the Economic and Social Committee, the Committee of the Regions, and ESA as well as many players from industry – have rejected the Commission's idea of funding the program on an intergovernmental basis. They have called for an alternative, the most credible of which is keeping GMES within the EU budget over the duration of the next MFF. The vast majority of Member States have expressed this opinion in the Council; however, formal Conclusions could not yet be adopted. On the contrary, discussions over the following months showed that the group of Member States favoring the Commission's proposal is consistently growing. It is actually hard to tell whether these Member States effectively support the Commission's proposal or if they consider GMES a convenient pawn in negotiations on the overall MFF.

In light of this situation, one might think the Commission would have to reconsider the funding of GMES. However, despite the broad opposition to changing the GMES program, which has arisen so dramatically, there was never any clear indication that the Commission would amend its proposal. Quite contrary to the opinions of the Council and the Parliament, President Barroso has made clear on several occasions that the Commission will stick to the chosen approach. As a consequence, May 11 saw formal publication of the "Communication on the establishment of an Intergovernmental Agreement for the operations of the European Earth Monitoring Program (GMES) from 2014 to 2020."11 This proposal contains all the elements described above and will transform GMES into an intergovernmental program.

This Communication once again points out that the GMES program has experienced neither cost overruns nor significant delays. The Commission is also well aware that the decision to participate in the future funding of GMES "ultimately falls exclusively within the remit of Member States" and therefore entails a risk of discontinuity. Bearing in mind the time needed to prepare the necessary arrangements, the Commission's invitation for "all Member States to join in the effort" will not be sufficient. The mere fact that a delay in launching the first satellites in 2013 would lead to significant additional costs demonstrates the urgent need for an appropriate solution. Therefore, it will most likely be up to the Finance Ministers, or even the European Council, to reach a decision on the Council's formal position. A clear rejection of the Commission's proposal at the highest level could be an appropriate way to settle the matter without losing any more time. Such a decision could be made in June, but further delays are not unlikely.

In the end, the Council and the European Parliament have to agree on the overall MFF by the end of 2013, and thus on the future of GMES. In the meantime, the worst-case scenario still exists: ending the program with little more than sunken costs remaining. Whatever the outcome, the current situation constitutes a serious risk for the overall goal of smoothly pursuing GMES into its next programmatic phase.

 

References:

1. The European GNSS-Programmes (“Global Navigation Satellite Systems”)

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2. “Global Monitoring for Environment and Security”

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3. “Global Earth Observation System of Systems”

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4. See Article 189 of the Treaty on the Functioning of the European Union (TFEU)

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5. Regulation (EU) No 911/2010 of the European Parliament and of the Council, 22 September 2010

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6. Council Conclusions on "Towards a space strategy for the European Union that benefits its citizens," 31 May 2011

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7. “Proposal for a Council Regulation laying down the multiannual financial framework for the years 2014-2020” [COM(2011) 398 final]; “Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: A Budget for Europe 2020” [COM(2011) 500 final]

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8. “Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: A Budget for Europe 2020”[COM(2011) 500 final]

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9. Report 2011/2148(INI), January 19, 2012

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10. Resolution 2012/2509(RSP), February 16, 2012

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11. COM(2012) 218 final

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