Despite its relative youth, the European Union’s five-year-old space agency, the European Union Agency for the Space Programme (EUSPA), is poised to displace the decades-old European Space Agency as the biggest spender in the region’s space sector, according to a new report.
“The European Union as a distinct political entity is on the verge of overtaking the European Space Agency as the center of gravity for space in Europe,” said Michael Gleason, senior policy analyst at the Aerospace Corp. and author of the report, “‘A Geopolitical Awakening’: The European Union and Space,” published today.
What’s behind this spending shift is a move by EUSPA, which manages the EU’s Space Program, to begin supporting the bloc’s military, security and defense space needs, on top of its existing role running civilian services — such as positioning, navigation and timing, through Galileo, and Earth observation, through Copernicus — for the EU’s 453 million citizens.
Gleason’s analysis suggests EUSPA’s budget is on the verge of “doubling, tripling or even a five-fold increase” — a boost that would make the agency Europe’s leading spender on space technologies and services.
“The level of investment that the EU is on the cusp of approving is really historic, and it’s going to change the game in Europe significantly,” Gleason told me in an interview.
Established in 2021, EUSPA emerged via a rebadging and realignment of the former European GNSS Agency. “The growth in EU-owned space capabilities over the previous 20 years drove it to set up a dedicated space agency to manage existing and new EU space capabilities efficiently,” said Gleason.
ESA could not be the EU’s dedicated space agency because not all its member nations are EU countries. But because Europe’s spaceflight expertise is held by the companies and research centers in the ESA member states, Gleason said, EUSPA uses ESA as its prime contractor for the majority of its technologies.
ESA is set up so that each of its 23 member states that also belong to the EU get back whatever cash they put into the agency in the form of spaceflight work contracts for their domestic space contractors — a process called Geo-Return. By contrast, EUSPA has a different framework agreement that allows it to commission companies in any ESA member state (regardless of EU membership) that it thinks can deliver the technology it needs, unrelated to the size of their ESA contributions.
And it is this money that EUSPA spends with ESA and its members that is about to get a massive increase, according to the Aerospace Corp. report, as the EU’s space priorities shift to increasing the development of resilient space-based defense and security technologies.
Specifically, the EU is moving to put in place on-orbit defensive measures whose development was spurred by Russia’s 2022 invasion of Ukraine. These are designed to protect EU nations’ space assets and deter hostile activities against the member states from space. Long term, the aim is to cement ESA’s self-determination, ensuring its members are not reliant on non-EU nations for space security technologies.
EU leaders have said EUSPA will likely be set a budget of at least €60 billion for the period 2028-2034, which breaks down to €8.5 billion per year, up from its current €3 billion annual expenditure. But it could be even more, Gleason said: A potential “five-fold increase from the current level, to €15 billion a year” is also being mooted.
“It’s unclear what amount will be approved by EU Member States and the EU Parliament,” he later told me by email, in response to follow-up questions. “That debate will occur this year. The €15 billion a year is on the most optimistic end of the spectrum of possibilities, but I think it is plausible.”
In addition, the EU plans to provide extra funds for large, standalone defense space and security projects. These include the European Space Shield for defending satellites like the Galileo constellation, and IRIS², a planned multi-orbit, government and business communications constellation.
Currently EUSPA’s 2025 contribution to ESA accounts for €1.7 billion — or 22.3% — of the agency’s €7.7 billion budget, “which is the biggest single chunk of money ESA gets from any contributor,” Gleason said. If the increased funding materializes, “it means the EU money flowing into ESA could end up being greater than 50% of its budget — giving the EU more influence over what ESA does than it has ever had since it was established in 1975.”
One corollary of increasing EUSPA’s contribution to ESA could be a more prosperous future for some European spaceflight contractors, because EUSPA’s cash, coming from central EU funds, does not have to undergo Geo-Return. “That will be a way for them to benefit from more money from the EU coming through ESA as that money can go wherever the most value for money is,” Gleason said, adding that non-EU nations like Norway and the U.K. could benefit, too.
For U.S. companies hoping to export their defense space or security technologies into Europe, however, “it’s time for a reality check,” said Gleason. “Just having something from the U.S. that’s less expensive and that does the job very well might not make the sale, because the Europeans are willing to spend more money to get that strategic autonomy and independent capability.”
“But when Europe has to buy something, because they don’t have a capability, like launches on a SpaceX Falcon 9, if there’s a no other way around it, they will buy American products. But just don’t be surprised if saying that you have a lower price doesn’t win the argument.”