When EU transport ministers gave the green light for Europe’s very own satellite navigation programme, called Galileo, in March, it seemed like the continent was well on its way to becoming a dominant player in the global satellite scene.

But almost six months later, the project, a joint initiative of the European Commission and the European Space Agency (ESA), has run into difficulties on account of bickering between Germany and Italy over project leadership.

"Germany didn’t want to give any money until after the federal elections. And now both Germany and Italy, the two main contributors to the project, have not been able to agree about who takes over. It’s basically a question of prestige - each one wants to play leader," an EU official who asked not to be named told DW-WORLD.

Tension between Germany and Italy

In a progress report on Galileo published on Tuesday, the European Commission said there had been delays caused by problems over finalising each country’s contribution.

"Some member states are, mainly for political reasons, claiming the status of the foremost contributor to the programme," the report said.

An EU official told Reuters that Italy wanted the lead role because it had been involved in Galileo early on and it was not leading other ESA projects, such as the French-led Ariane rocket programme.

But Germany had also put itself forward as the project leader on the basis of its financial contributions to ESA – some 562 million euro yearly. This year, Germany also increased its funding to ESA’s scientific research programmes by an additional 30 million euro.

So what is Galileo?

The Galileo global network of 30 navigational satellites run entirely by Europe will rival the only two existing global navigation systems - the U.S.-built Global Positioning System (GPS) and the almost obsolete Russian Glonass system.

As far back as the 1990s, the European Union saw the need for Europe to have its own global satellite navigation system. The European Commission and the European Space Agency joined forces to build a global satellite navigation system that will be under civilian control.

By placing satellites in orbits at a greater inclination to the equatorial plane than GPS, Galileo is expected to achieve better coverage at high altitudes. This is hoped to make it better suited for operation over northern Europe, an area not well covered by GPS.

The Galileo satellites are expected to pinpoint one’s exact location on a map with an accuracy of one metre.

The satellites will be used as a navigational network for ships, planes, cars, lorries and spacecraft and is expected to provide surveying references for building roads, bridges and cities. In the future, the satellite network will have other applications too such as in new personalised services for mobile phone and pocket computer users.

Most of the satellites are expected to be launched in 2006 and 2007. They will orbit about 23,000 kilometres above the Earth, where their positions will be monitored by a series of ground stations.

Galileo bogged down by funding problems

However, Galileo has been mired in controversy and debate for almost a year and a half, partly because EU states such as Germany and the UK had reservations about the financial viability of the project that is expected to cost some 3.2 billion euro.

A breakthrough was achieved at the EU transport ministers’ meeting in March this year where ministers signed off 450 million euro in funds to pay for the next phase of the development programme of Galileo.

The money came on top off about 100 million euro already approved and another 500 million euro pledged by the inter-governmental ESA. The meeting also decided that costs for the satellite system, which would have many commercial benefits, should be shared by the private sector.

Germany still not living up to its cash promises

Germany also pledged a whopping 137.5 million euro to the project at the time.

But the Galileo project still hasn’t seen the money.

The EU official was hopeful that with the German elections over, Germany would soon release the promised funds.

A spokesperson at the German ministry for Transport, Construction and Housing said: "We’re interested in releasing the funds as soon as possible, but the orders have to come from the German government. It could take anything from between a few weeks to a few months."

Lack of funding hurting relations with US

But the official at the EU said that much damage has already been done. "We have already lost 6 months," he said. But more importantly, it’s the loss "in terms of credibility in our relation with the US" that the EU official is more worried about.

U.S. opposition to Europe’s development of its own navigational satellite system is no secret.

One of the United States’ biggest concerns is security, fearing that Galileo could be abused by America’s adversaries and offer them an alternative system.

In a letter to EU defence ministers last year, U.S. Deputy Defence Secretary Paul Wolfowitz said the EU’s Galileo global positioning project could complicate America’s ability to provide satellite information to its own forces in times of crisis.

At present the U.S.-built GPS which is controlled by the Pentagon is the only dominant satellite navigation system in the world and America has indicated that it would like to keep it that way.

Can Europe really go it alone?

Europe, however, is keen to loosen its technological dependence on America and prove that it is capable of producing an equally superior civil satellite navigation system.

In a telling statement last year, French President Jacques Chirac said: "The United States spends six times more public money on the space sector than Europe. Failure to react would inevitably lead to our countries becoming first scientific and technological vassals, then industrial and economic vassals."

But whether Europe can implement its big ideas remains to be seen.

"There’s a lot at risk. We have to obtain frequencies quickly and also pay our large team of specialised engineers. If we can’t even move forward with funding, I don’t know what the U.S. is going to think about us," the EU official said.