CNN REPORT(Reuters):

26-APR-99

BRUSSELS, April 26 (Reuters) - Germany called on its European Union partners to back plans to invest $3 billion in Europe’s own satellite navigation system to compete with U.S. and Russian technology, EU sources said on Monday.

German Transport Minister Franz Muentefering will press in June for a firm undertaking that the programme, dubbed Galileo, will go ahead, officials said after a weekend meeting of EU transport ministers.

"Germany pushed very hard. They’d like political agreement in June that we’ll build our own system, though a few countries have a few queries to clear up before then," said Sarah Lambert, spokeswoman for acting EU Transport Commissioner Neil Kinnock.

Satellite navigation is used to pinpoint aircraft, ships and trucks and should in future improve the efficiency of public transport, maritime navigation and air safety.

Once the system is established, it could be extended to numerous other uses, Lambert said.

Half of the 2.9 billion euros ($3.08 billion) cost of the Galileo, or Global Navigation Satellite Systems, would be covered by the EU’s own budget and the European Space Agency.

"That means member states would only have to cough up 1.5 billion euros between the 15 of them over the next 10 years," Lambert said. "This is a market that could be worth as much as 80 billion euros in time."

Kinnock believes that Europe can exploit gaps in the systems currently operated by the United States and Russia, both of which can be subject to military control at certain times and neither of which provide total global cover.

A European consortium, including Daimler-Chrysler (DAIG.F), Alcatel (CGEP.PA), Matra-Marconi (MATR.PA) and Alenia (SIFI.MI) is carrying out studies on how to build Galileo.

But before EU states give the green light, they want a number of questions answered, Lambert said.

Some are concerned about how private finance is going to be raised, others about how to guarantee the system is compatible with existing technologies and others about whether users will have to pay for the European system.

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