ESA’s Shrunken Budget for 2014 Bigger than it Seems

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PARIS — The 4 percent decline in the European Space Agency’s top-line budget for 2014 masks a continued upward trend in spending by many of its member nations, who have increased space investment steadily in the six years since the start of the financial crisis, ESA officials said.

In addition, several of ESA’s 20 member governments that had accumulated debt to the agency in recent years — France, Italy and Spain among them — have made sizable catch-up payments that are not reflected in the budget as announced Jan. 17, the officials said.

Finally, the picture is distorted by the fact that the European Union, which has become ESA’s biggest single contributor, will not make its full payment until midyear because of the EU’s budget cycle.

Gerhard Kreiner, ESA’s head of corporate planning and control, said the agency’s member governments in 2014 are investing 700 million euros ($950 million) more than they did at the start of the financial crisis in 2008.

“Counting only our member states, the increase has averaged 4 percent per year beyond the inflation rate,” Kreiner said in a Jan. 17 interview. “When you consider how hard hit some of them were by the financial crisis, the increase is a testament to their belief in space as an investment in their economies.”

Kreiner said even nations that were hardest hit by the financial crisis, and which are still struggling to report economic growth, have made “really major efforts” to catch up on past underpayment to ESA.

ESA Budget Charts

France, which vies with Germany for the title of ESA’s biggest supporter — in cash investment it’s Germany; in total support, including non-cash assets like the Guiana Space Center, it’s France — is the best-known example. 

France fell deeply into debt to ESA around 10 years ago and has since sharply reduced the amount due while maintaining its spending on programs. In ESA’s budget document, France is listed as contributing 754.6 million euros, but officials with the CNES space agency have said their contribution in 2014 will be 811 million euros including debt reduction.

Kreiner said Italy, which is ESA’s third-largest contributor, also has worked to reduce its payment-due line at ESA despite economic hardship. Kreiner said that in 2013 Italy made a payment of 120 million euros in addition to its planned spending to account for past underpayments, and that Spain did likewise.

Other nations, including Sweden, have increased their spending at ESA. 

The European Union’s seven-year budget cycle, the last of which ended in 2013, has artificially depressed the expected EU payments as recorded in the budget released Jan. 17.

Kreiner said the 623.9 million euros in EU payments for 2014 that appears in ESA budget documents is in large part made up of monies paid last year for programs that have not yet needed the investment because of schedule delays.

Once the new seven-year EU budget begins releasing funds this spring, the EU’s cash spend at ESA will total more than 1 billion euros in 2014, Kreiner said.

The EU’s two flagship space programs, the Galileo navigation satellite system and the Copernicus network of Earth observation satellites, are under the technical management of ESA. 

With the exception of ESA’s science budget, which is financed through mandatory contributions from ESA governments based on their gross domestic product, ESA nations select which programs they want to support, and commit to a funding level.

It is then up to ESA to track these contracts and determine how much money is needed in a given year to fund the industrial work. If the work moves more quickly than foreseen, it could increase the amount a given nation needs to pay in a given year although ESA does have authority to move money around.

If a program is delayed, its big investor nations will be asked for less from ESA. That is the case in 2014 with Britain, whose expected contributions in 2014 total 270 million euros, down 10 percent from 2013, the first year of Britain’s five-year commitment to raise its ESA profile.

A U.K. Space Agency official said the main reason was the several satellite telecommunications programs in which Britain is a big investor have not progressed as quickly as planned, notably the NeoSat next-generation telecommunications platform.

Kreiner said the agency had about 500 million euros left over from its 2013 accounts that will be made available early this year as contractors’ work progresses and ESA pays the bills.

ESA habitually asks its governments for cash payments three times during the year — in mid-February, June and October. Monies left over from the previous year are used to pay for the spike in bills to ESA from industry in December and January as the companies close their annual accounts, Kreiner said.

 

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