Germany was outvoted as European Union nations clinched a complex budget deal that will provide public funding for a satellite navigation system, a disputed technology institute and a Kosovo peace mission.
The agreement reached late on Friday night allows unused funds earmarked for farm subsidies and a range of scientific and industrial projects to be redirected to pay for the Galileo satellite system, a rival to the US Global Positioning System. The 26 other member states voted for a 120.3 billion euro ($178.1 billion) annual budget for 2008, representing 0.96 percent of the bloc's gross national income.
The political deal, which must still be formally approved, allowed the EU to meet a shortfall of 2.4 billion euros in Galileo's start-up costs out of public money after the private sector refused to shoulder the risk.
It also provided 309 million euros for the European Institute of Technology, a brainchild of the European Commission meant to help Europe retain more of its scientists and turn their inventions more successfully into commercial applications.
Commission President Jose Manuel Barroso hailed the agreement in a statement on Saturday to back two "strategic European flagship projects (that) will foster innovation, technological progress and competitiveness across the whole EU." The budget also earmarked 285.3 million euros for foreign policy and security operations, including planned police and administrative missions in Kosovo replacing the United Nations.