EU Funds Rival GPS Navigation System

European Union ministers approved funding Tuesday for a rival to the American GPS satellite navigation system, overcoming cost concerns and U.S. military objections that have delayed the launch for over a year.

Transport ministers released $392 million in development money, an EU official said on condition of anonymity. The European Space Agency has already committed $485 million.

Backers of the European system, dubbed Galileo, say it will create jobs and reduce Europe's dependence on U.S. technology.

Six countries — Germany, the Netherlands, Denmark, Austria, Sweden and Britain — had originally balked at Galileo's $3.24 billion total price tag. They also questioned the commercial viability of setting up a competitor to the freely available Global Positioning System, the de facto global standard.

Washington also lobbied against Galileo, calling it unnecessary. The Pentagon, which controls GPS, wrote in December that Galileo could interfere with next-generation GPS signals intended for military use.

But Germany signed on to the project shortly before an EU summit this month, citing the "considerable political, strategic and economic importance" of Europe having its own system.

That ensured a majority Tuesday for moving ahead with the project, which is planned to be operational in 2008.

At their summit this month, EU leaders reaffirmed their support for launching Galileo but insisted that more private investors be brought on board to help cover the costs.

Tuesday's agreement called for setting up a joint undertaking to handle Galileo's development phase. Private companies will be able to participate after 2003, the official said.

The development agency will be based in Brussels, he said.

By Paul Geitner