IT IS TIME TO ACT IN SPACE EXPLORATION: A letter of European space industry to decision makers

Europe has often fallen behind in key sectors because of a lack of daring decision at key moments. We are at such a historical moment for human and robotic exploration. Stepping up the ladder or falling off is at stake. The concerned European industry is asking political decision-makers to be bold at the next ESA Council at ministerial level.

Dear Madams and Sirs,

At the beginning of this decade, the US and China embrace exploration boldly for a sustained robotic and human presence in the Solar system. The early space race was a sprint, especially for the first Moon walk, but the new race will be long lasting and into deeper space, especially for Mars. Besides medium players such as Russia and India, non-traditional space-faring countries like UAE or Saudi Arabia are now also engaging in space exploration programmes. Under such geostrategic circumstances a European standstill is not an option.

We are at the dawn of a low Earth orbit economy, expanding to the Moon and later to Mars. Europe must shape its own future and not just passively witness others exploring beyond Earth, establishing their economic influence, and reaping the benefits. The European space industry strongly holds that Europe cannot afford to be sidelined, considering its GDP and international ambition. Skilled jobs creation and technological innovation with spillovers well beyond space technology are at stake.

But there is much more. With an accelerated pace of space activities around the globe, we want to alert politicians that it is their decision now for Europe to have its own sovereign capabilities or to be a follower forever and miss out market shares and future prosperity.

The European industry can undoubtedly deliver. Europe’s strength is unique multilateralism, creativity and diversity, federation of resources and know-how for common goals. The thrill of the first ever asteroid landing (Rosetta mission) and recently Ariane 5’s perfect launch of the James Webb Space Telescope are outstanding proofs of competence. The same has to hold true for exploration.

Cooperation on the International Space Station, on Orion and soon the lunar Gateway and Mars sample return, all led by the US with significant European contribution, has already strengthened European industry resulting in some instances in worldwide market advantage like the on-going B2B initiatives well established with US and other industries.

In this new era of expansion, we as space industry, have to strive for more autonomy in a level playing field. We are ready to move on to the next step and embrace new innovative business models, such as service-based commercial initiatives. Like in the US, governmental support and commitment as anchor customer is vital, as well as setting clear rules for co-funding and derisking technology maturation. We also foresee that numerous non-space industrial sectors such as energy, automotive, health, food, etc. will be profiting from opportunities created by a large variety of exploration challenges in order to tackle immediate grand challenges including energy and climate, circular economy and sustainability.

This open letter is therefore a plea for decision-makers to step up at the occasion of the ESA Council at ministerial level in November this year. Courageous and bold decisions are needed to unlock the potential of industrial growth by supporting fully the Terrae Novae programme proposal and its 2030+ strategy roadmap. Failing to open the door for the next decades will see Europe’s heritage of explorers vanish, and so will the pride of the young Europeans bound to watch others making history, leaving the dream to the ones who dare, taking away the emotions of being part of this endeavour and putting their inspiration in a straitjacket.

Space exploration is not a nice to have, it is also more than pride and soft power, it is a civilisation necessity.


For Adriatic Aerospace Association

Slobodan Danko Bosanac, president

Signatories of the letter:

The EuropeanAI Newsletter

Welcome to the EuropeanAI Newsletter covering the European AI and technology ecosystem. If you want to catch up on the archives, they’re available here.

The European Commission set up a virtual space for interested parties to engage with and shape the EU and US discussions in the Trade and Technology Council together. In this newsletter, we cover the potential interaction between the proposed regulation on foreign subsidies and agreements within the Trade and Technology Council’s work streams.

The European Commission is also running a tender in correlation to the Digital Services Act and the Digital Markets Act for which it is commissioning a foresight process related to these regulatory interventions for online platforms.

Other key topics to keep an eye on are AI regulatory sandboxes, as defined in the AI Act. They are currently being discussed in the European Parliament, both in light of their interaction with general purpose AI systems, with an eye towards increasing legal certainty and fostering innovation. We’ve previously covered AI sandboxes and testing environments in this newsletter.

Policy, Strategy and Regulation

The EU’s new foreign subsidies framework and its potential implications for chips manufacturing

The Council of the European Union and the European Parliament reached a provisional political agreement on the regulation on foreign subsidies distorting the internal market. The agreement paves the way to the adoption of the regulation into effective law, which is subject to final approvals by the Council and the European Parliament.

What is it?

The regulation institutes a regime for oversight of state subsidized investments and economic activities of companies in the EU. These state subsidies may take various forms, such as grants, loans, capital injections, tax incentives, or exclusive rights. All companies operating within the Single Market are captured by this proposal, whether they are state-owned and private, based inside or outside of the EU.

The aim is to screen for and preempt the direct distortative or spillover effects of state aid to those companies, instigated by non-EU countries.

  • Direct distortive effects may arise when a foreign company finances its activities in the EU using foreign subsidies and this affects its competitive advantage compared to competitors in the Single Market.
  • Spillover effects refer to the second order impact of foreign subsidies. It can arise when foreign subsidies create an undue competitive advantage for a company abroad that spills over to the company’s operations in the Single Market For example, through capacity expansion, support for bottom line, etc..

Under the proposed regulation on foreign subsidies, companies must notify the European Commission of planned mergers and public procurement bids prior to their implementation should they be above certain thresholds. The Commission reviews the mergers/bids, assesses the existence of foreign state aid and whether it distorts competition.

  • If the positive effects outweigh the distortive ones, the Commission may approve the merger/bid.
  • If the distortive effects prevail, the Commission may: (i) impose redress measures on the companies concerned; and (ii) request them to commit to implementing remedial measures.

It may also investigate mergers and bids of lower values, as well as any other economic operations in the EU on its own initiative. Companies, interested parties and EU member states may inform the Commission of suspected distortive foreign aid.

Analysis: Why is it AI-relevant?

According to Eurostat, the US is the largest foreign investment partner to the EU in terms of both stocks and flows. In terms of stocks (i.e. positions), the US accounts for the largest share (~30%) of the foreign direct investment in the EU in 2020 (the latest, for which public statistics is available). In terms of direct investment flows, the US ranks first among the other EU partners, with more than EUR 250 billion of investments. The US was also the largest importer in the EU of goods and services. These data points appear to suggest investment and trade intensity that exposes the US the most to any EU measures targeting foreign aid.

The proposed EU regulation on foreign subsidies includes critical infrastructure and innovative technologies, such as semiconductors and AI, and comes at a time when the EU and the US are attempting to strengthen their cooperation and facilitate investments in trade and technology through the EU-US Trade and Technology Council (TTC; read more here). A key area of overlap between those two efforts will likely be the TTC’s focus on investments in semiconductor manufacturing facilities.

In a joint statement earlier this year, the EU and the US have committed to avoiding “subsidy races” in the sector. Language in the statement suggests that the two parties are aware of subsidization effects of their schemes for promoting home-grown chip manufacturing through the EU Chips Act and the US “CHIPS for America Act” (e.g. Intel’s  new factories under construction in Magdeburg, Germany and in Ohio, the US, and Taiwan Semiconductor Manufacturing Co Ltd’s new plant in Arizona).

In order to navigate potential trade tensions, the EU and the US have committed to cooperating on subsidies to chip manufacturing via the World Trade Organization (WTO). However, the EU’s proposed foreign subsidies regulation will operate in parallel to the WTO’s subsidies controls and the TTC’s cooperation arrangements. It appears to serve as a safety vault for the EU in case foreign industrial policies change in unexpected ways. For example, fluctuations in demand or state measures could possibly affect projected policy outcomes and economic fundamentals of a sector (e.g. by resulting in overcapacities, “killer” acquisitions). Which, in turn, may have distortive effects on the EU market (e.g. lessened competition).

Notes in the Margins: The EU’s proposed regulation on foreign subsidies complements its existing framework for screening foreign direct investments (previously covered in this early edition of the newsletter). The former monitors and intervenes with foreign firms’ investment activities on grounds of their potential distortive effects on competition in the Single Market. The latter monitors and could preempt investments in certain sectors on grounds of security and public order. For example, sectors such as defense, energy, other critical infrastructure, critical technologies (such as semiconductors and AI).


Dataset auditing and AI tools

The European Parliament’s Panel for the Future of Science and Technology (STOA) published a study on auditing the quality of datasets used in algorithmic decision-making systems (more specifically, in machine-learning applications). The study examines different types of bias, their causes, associated technical and legal complexities, and approaches to mitigating bias.

It puts forward a range of policy options, the most interesting of these are: (i) application and appropriate interpretation of existing and proposed draft legislation (e.g. non-discrimination laws, the General Data Protection Regulation, the Digital Services Act and the Digital Markets Act, the Data Governance Act, the Data Act, and the AI Act) – instead of adoption of new specific rules — in order to tackle bias; and, (ii) introducing requirements and schemes for standardization and certification of datasets to be used in AI systems.

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Dessislava Fessenko provided research and editorial support.
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