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European transport ministers failed to approve funding last week for the European Union's (EU's) half-share of the $2.3bn (£1.6bn) needed to fully develop the satellite-based Galileo location system.
Loyola de Palacio, the EU's Energy and Transport minister, said that the Galileo project would "go up in smoke", unless the funding received approval by the end of the year.
Last month, the European Space Agency approved $466m in funding for Galileo. However, the project cannot proceed without matching funds from the EU, and it failed to receive approval from the needed majority of eight EU transport ministers.
Countries opposed to funding the system expressed concern over Galileo's cost/benefit ratios and the need for EU funding for more than 20 years, even though the system is designed to be self-supporting through user charges for advanced positioning and location services and taxes on terminals.
The EU had originally backed Galileo to avoid dependence on the US GPS system, which is funded by the Defence Department and subject to shutdown, jamming or manipulation in time of war. Dual-band Galileo/GPS receivers would also provide greater accuracy than single-channel receivers.
GPS receivers are used in a variety of enterprise applications, including surveying, fleet management, aircraft navigation and truck and cargo tracking systems.