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Global economic recession forces ESA spending freeze

Posted: January 15, 2010

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The European Space Agency is instituting a spending cap for the next two years to lighten the burden on its member states brought on by the global economic recession, according to the agency's head.

ESA Director General Jean-Jacques Dordain speaks to reporters in Paris on Thursday. Credit: ESA/S. Corvaja
During 2010 and 2011, ESA will freeze spending at the 2009 level of 3.35 billion euros, or about $4.8 billion, said Jean-Jacques Dordain, ESA's director general.

ESA spending has been on the rise since 2006, increasing nearly 10 percent each year as many of the agency's programs went through the most expensive period of development.

Although spending will not rise in 2010, ESA's budget this year is 3.74 billion euros, or about $5.4 billion. The bulk of the 2010 budget goes toward navigation, Earth observation, launchers and space science.

"The recession has impacted member states finances, and we have had to try to make sure that ESA's expenditure is in line with what member states can afford," Dordain said.

The agency's 18 member states have asked Dordain to avoid taking a loan to pay for ESA programs in the next few years, but Dordain said the spending freeze will not result in the cancellation of any projects already approved by the ESA Ministerial Council.

"Member states do not want me to borrow money and then get them to carry the can," Dordain said through a translator.

Dordain did not rule out delaying some programs because of the financial difficulties.

"There's no program falling by the wayside, but we will have to work with an implementation schedule that takes into account the payment constraints," Dordain said.

Schedule slips could push spending on some projects into future years, alleviating the financial burden on member states in 2010 and 2011, but officials would not cite specific programs in danger of delays.

Dordain said ESA will not back out of committed programs or contracts already signed with industrial suppliers.

"It's up to me as [leader] of the agency to make sure that, on the one hand we can respect all of our commitments to industry, and new commitments that have to be made in order to implement decisions of the member states, and there is no cancellation of any program," Dordain said.

ESA may also revamp its contracting practices and make higher payments to suppliers later in project development, instead of paying hefty signing bonuses.