Britain warns that freezing UK out of Galileo satellite could cost EU billions

British Brexit negotiators have warned Brussels that forcing Britain out of the Galileo satellite navigation system will delay the programme by up to three years and cost the European Union up to one billion euros.

UK officials also raised the prospect of reopening negotiations on the Brexit bill to recoup over £1 billion of investment in the project if the EU maintained its insistence on freezing British businesses out of the €10 billion (£8.8bn) project on legal grounds.

European Commission officials, who are leading Brexit negotiations on behalf of the EU, were informed in an expolosive briefing note that Britain could and would develop its own satellite navigation programme if it continued to be excluded.

“An end to close UK participation will be to the detriment of Europe’s prosperity and security and could result in delays and additional costs to the programme,” the British note warns.

Britain accuses the commission of making statements that risk “being interpreted as a lack of trust in the United Kingdom” and accuses the EU of reneging on promises made over the Brexit bill in the December joint agreement between London and Brussels.

Britain has a “strong objection to its ongoing exclusion” from discussions on the development of Galileo after 2019, which it said discouraged British businesses from participating and prejudge future negotiation of the UK-EU security partnership after Brexit.

Continuing this exclusion risks “timing out” any future British investment in the project for contract and tendering reasons, the paper, which calls for “an urgent resolution” to “keep open the possibility of future UK participation in Galileo”, states.

The row over Galileo centres on the EU’s insistence that Britain must lose access to source codes or technology to the encrypted navigation system for government and military users after Brexit because it will no longer be a member of the bloc.

It would instead be granted access to the highly secure military applications on the same terms as the US, without the codes.

The British side does not accept EU arguments that, legally, it cannot get key elements of Galileo certified as ‘secure’ if it contains technology held by a non-member state, arguing that if the bloc wanted to be constructive, it could find a way.

In the note, Britain offers to pay towards the running of the programme but demands that British companies can compete for all contracts.  The UK accepts that certain rights are reserved for EU members but insists on the need to independently assess the system so it can be relied on for security and defence.

“Excluding industrial participation by UK industry in security-related areas risks delays of up to three years and additional costs of up to €1 billion to the programme,” the note states.

It reads, “As a logical consequence of the exclusion and uncertainty surrounding future UK participation, the UK is exploring alternatives to fulfil its needs.

“The development of a domestic system is economically viable and made possible by the expertise of the UK space sector. However, it remains the UK’s immediate preference to collaborate in Galileo”.

Britain’s space sector has a £14 billion per year turnover, which represent 7 per cent of the global share, it adds.

“It will not be straightforward to effectively fulfil all Galileo security work elsewhere,” the note reads.

During negotiations over the €45 billion Brexit bill,  Britain agreed not to request repayment for its share of EU space assets - including over £1 billion of investment in Galileo - on the basis that the UK would be part of the system under a post-Brexit security partnership.

Now that UK participation appears to have been ruled out by European Commission lawyers, senior Whitehall sources said that the UK was now considering its options “including financial” because British space assets were not part of the calculations.

It was reported today that Berlin was backing Brussels in freezing out Britain from Galileo despite the objections of countries such as France, Spain, Sweden, the Netherlands and the Baltic states.

French officials are unhappy with the European Commission and Germany turning the UK’s exclusion into a “ ‘pedagogical exercise’  showing the costs of leaving the EU, According to the The Times

EU-27 representatives were said to be unhappy that the commission, which leads Brexit negotiations on their behalf, failed to respond to a British letter asking for clarification over Galileo for two months.