Is a “fair return” admissible on space activities funded by the EC/EU?
- Paper number
IAC-05-E6.3.13
- Author
Dr. Katharina Kunzmann, University of Cologne, Germany
- Year
2005
- Abstract
The European cooperation in space activities has been carried out by ESA and its predecessors over the last 40 years. In recent years, the EU/EC became increasingly involved in space activities, predominantly in co-operation with ESA. The EC’s new Financial Perspectives for 2007-2013 might foresee up to Euro 10 billion for space activities. One of the keys to ESA’s success is its industrial policy and its main feature, the so-called “fair return” or “geographical distribution”. As the EU/EC gets more engaged in space activities and applications, the question arises how it can organise and finance these activities. Another, but closely related question is how the respective industrial policies, especially the awarding of contracts can be harmonized in the long term as the co-operation between both organisations deepens. The ESA-Convention enables the member states to participate on a voluntary basis in various space programmes. The EC provides this option only to a very limited extent; usually, the financing is based on the EC’s general budget and confined within its legal framework. ESA aims at a geographical distribution and thus at integrating the space industries of its members whereas the EC Treaty demands open competition in a free market, disregarding that most of the EU member states had a greater incentive to agree on large scale funding if they could expect a certain return for their own space industries. Thus it would be interesting for the EC to apply some kind of fair return with respect to its own funding, no matter if it planned to award contracts directly or indirectly via ESA as implementing agency. There are two questions to be answered in this regard: First, whether the fair return rules applied by ESA are compatible with EC law; second, whether a (modified) return could be applied to EC funds as well. The paper focuses on both issues. In a first step, it examines whether the material fair return rules and their application comply with the relevant EC Treaty provisions, i.e. those on state aids and the market freedoms, and with secondary EC law, mainly the public procurement rules. Secondly, it discusses whether a difference has to be made between funds of the member states and those originating from the general EC budget. This paper presents some of the results of a research project currently carried out at the Institute of Air and Space Law at the University of Cologne.
- Abstract document