Richard North, 04/03/2005  

This week, a small frisson of excitement was running through that tiny cognoscenti which follows the esoteric details of the EU’s Galileo project, with the expectation that the winner of the contract to build the €2 billion satellite system was to be announced.

However, come Wednesday, when the winner should have been declared, officials of the "Joint Undertaking" charged with appointing the consortium of companies which was to do the work were strangely reticent.

For what is now the second time, they declared an inability to chose between the two candidates, and told waiting reporters that they were delaying the selection for another three months.

The two rival bidders – one a consortium including France's Thales, the Franco-German EADS and Inmersat of the UK and the other a partnership between Italy's Finmeccanica, Alcatel of France and two Spanish companies - were clearly disappointed by the delay.

However, while the official reason was that the contest was so close that Brussels could not make up its mind, the Financial Times has come up with what it believes is the real reason for the delay.

Apparently, Brussels is secretly manoeuvring to persuade the two groups to join forces and co-operate in a truly pan-European strategic industrial venture ultimately involving €7bn of investments and creating, says the commission, 100,000 new jobs.

One advantage of this arrangement would be that it could avoid devisive political conflict but the main benefit is that it could provide a powerful stimulus for further aerospace and defence consolidation, building the commission's much wanted European "industry champion" in the defence/aerospace sector.

Once more therefore, the sole commission agenda is coming to the fore – integration, integration, integration. Whether it is trade, terrorism, public health or – in this case – satellite technology – nothing is to big or too small to be harnessed to that single objective.

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