The European Commission has finally decided to move the responsibility of building the Galileo satellite positioning system from the private sector to the public sector. The decision is met with relief by all sides, considering that the 8 company private consortium which was in charge until now had not reached any agreement in its 4 years of existence, becoming ultimately responsible for a similar delay in the implementation of this vital European infrastructure.
Galileo is a global positioning system by satellite which will eventually compete with the American GPS system (a military owned one with free civilian use) and the Russian and Chinese projects. It is a very good (or bad) example of what challenges Europe is today facing. Europe wishes to build independent capacities in many sectors. This independence is vital for the survival of our block of countries in this century. We are facing competition from old forces (Russia) but also new ones (China and India, soon Brazil and maybe South Africa). We are also more and more realizing that we can't only depend on the traditional US ally. Our interests do not fit theirs and if our ideas are somewhat similar (which is also true for India and Brazil, by the way), our ways of implementing them differ radically.
Unfortunately in this story, the project has met all the usual hurdles characterizing the European building. The first one has been the strong opposition of the USA which have tried everything they could to stop or torpedo the project. This shows again the limits of our alliance with them. Their military system has no interest in seeing a GPS system which they won't be able to disable at will such as the current one. They also don't want to see Europe reinforce its leadership in the space field which they see (and very truly so) as strategic. Quite logically then, the EU has seen internal opposition to the project coming from the USA most unconditional allies, namely the UK. Seeing that its maneuvers were failing, the US government has requested from its usual Troyan Horse to do as much damage as possible.
But fair enough, the worse hurdles have come in an also very usual way for European projects. Member states could not agree on the level of public funding to allow for this project. At a time when telecoms and computer companies were thriving, they decided that a private public partnership (led by a private consortium) with a concession system would be the best option. You have to remember that unlike GPS, Galileo will be a fee paying system. It was supposed to make its implementation attractive for public and private investment. To beat the American free competition, the Galileo system will offer a tenfold better precision on all axis, which should allow a much wider use and in areas were GPS level of approximation was forbidding its application. Tests and real size trials have shown that it was perfectly reachable for EU technologies. But the consortium could still not reach any agreement. This in a very "Airbus" way. That is meaning that each member of the consortium tried to get more of the business than reasonable while each member state involved also applied unacceptable pressure to make sure that its population would benefit the most, through employment and indirect effects.
All this means that the EU proposal of making the project public again (at least for the implementation phase) has all chances to be agreed on. This implementation will most likely will entrusted to ESA, which has showed its efficiency in earlier projects. Private companies will then only get concessions in the exploitation phase, in a similar way to what happens in the transportation world. This is probably ironical if you think that most applications of the systems will be in the same sector. Vehicle positioning is the most obvious use, but transportation companies are also impatiently waiting for the system to be implemented. Indeed, in our containerized world, one need a much better precision to be able to trace containers individually over the planet. GPS is unable to provide this with an acceptable margin of error at the moment, but Galileo with its metric precision could revolution the transportation world.