By Christopher Booker

Galileo, the intended rival for the GPS satellite system, is one of the EU’s most megalomaniac follies, says Christopher Booker

Last week brought further embarrassments to the two biggest and most megalomaniac projects the EU has ever undertaken. One was the suspension of its vast carbon trading scheme, the chief component of its drive to fight global warming, after it was discovered that internet hackers had stolen carbon emission permits worth £35 million. The second was the suspension of a top German businessman after it was revealed, by WikiLeaks, that he had told US diplomats the real, and carefully hidden, purpose of the Galileo space project.

Criminal gangs have for some time been targeting the EU’s Emissions Trading Scheme (ETS), which forces electricity firms and other large concerns to pay £80 billion a year for the right to continue emitting CO2. In 2009, Europol uncovered a massive VAT racket involving carbon permits which had robbed EU taxpayers of five billion euros in real money, one of the biggest frauds in history. In 2010 it exposed the theft of another half a billion euros in Italy alone, with police investigations still continuing in nine other countries, involving raids on hundreds of offices all over Europe.

What is new about the latest revelations, which have led to the suspension of the ETS for at least a week, is that the criminals have moved on to the electronic theft of millions of the permits themselves. Although the fraud has so far been detected only in five countries, the authorities have, as yet, no idea of the true scale of a crime which could threaten the survival of the world’s largest carbon market.

The offence of Mr Berry Smutny, the now-suspended CEO of a German firm which has a £500 million contract to build 14 satellites for the Galileo global positioning system, was that in 2009, according to Wikileaks, he told senior Americans at a private dinner party that it was a “stupid idea”, intended only to serve French interests at the expense of EU taxpayers. This was only a hint – and even this was enough to get him suspended – that the real purpose of Galileo, the EU’s rival to the American GPS system, is quite different from what the world has been told.

The cover story for Galileo, from the time of its launch in 2000, was that it was a civil project, largely to be paid for by private investors, who could then charge its users. GPS, on the other hand, is funded by US taxpayers as an openly military project, which is why its spin-off uses, such as to the owners of sat-navs, are free. It was hoped that Galileo could be paid for through a satellite-based road-charging scheme across the EU. But in 2007, after it became clear that this was not viable, the private partners pulled out, landing the entire, ever-rising bill on EU taxpayers.

The real story of Galileo, however – as a French defence minister admitted in 2004, and as I have been reporting here for years – is that it has always been pushed by France as a military system which in time of war could operate independently of the US system. It is seen as the key to France selling billions of pounds worth of satellite-guided missiles, above all to China, which in 2003 bought a 20 per cent share in Galileo.

But as the costs of Galileo that are publicly admitted continue to hurtle skywards – they rose by another £1.7 billion only last Tuesday – it is astonishing how Britain’s politicians remain oblivious to its purpose. The late Gwyneth Dunwoody spoke out, when she called Galileo “not one pig flying in orbit [but] a herd of pigs with gold trotters, platinum tails and diamond eyes”. Yet she did so only as chairman of the Commons transport committee, seemingly unaware that Galileo was not simply a transport issue, as the European Commission pretends, but should more properly have been considered by the defence committee.

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