The intertwining of geopolitics and business is highlighted by Italian Prime Minister Giorgia Meloni’s potential 1.5 billion euro deal with Elon Musk’s SpaceX for secure satellite communication. While negotiations progress, concerns arise over reliance on an American firm, especially amid the EU’s Iris² initiative aimed at establishing its own secure satellite network. Critics fear this collaboration could undermine European unity and impact domestic space industry efforts as discussions on the EU budget unfold.
The Blurred Lines of Geopolitics and Business
Since Donald Trump resumed his political influence, the intersection of geopolitics and business has become increasingly indistinct. In a bid to maintain strong relations with the new administration, Italian Prime Minister Giorgia Meloni is reportedly contemplating a significant agreement with her “friend,” Elon Musk, who serves as a notable advisor to the American president.
After Meloni’s visit to Mar-a-Lago, Trump’s campaign headquarters, Bloomberg has reported that she is in discussions with the SpaceX CEO to offer secure satellite communication services to the Italian government.
Negotiations for a Major Contract
This potential contract, valued at approximately 1.5 billion euros and spanning five years, would see Starlink, a subsidiary of SpaceX, providing encrypted communication and telephony solutions to Italy’s government and military. The satellite network would also be deployed during emergencies, such as natural disasters or terrorist incidents.
Bloomberg suggests that negotiations between Italy and SpaceX are progressing well. Nevertheless, Italian Defense Minister Guido Crosetto has publicly refuted claims of an agreement, stating that they are “studying and evaluating all technically capable solutions” to fulfill their encrypted communication requirements.
The prospect of heightened collaboration between the Italian government and SpaceX has elicited strong backlash from various quarters. Opposition leaders are understandably wary of the implications of entrusting sensitive data to an American firm, particularly one helmed by a figure as unpredictable as Elon Musk.
While Musk has been embroiled in tensions with Europe, this potential deal could undermine the continent’s space policy. Recently, the European Commission announced the rollout of 290 satellites aimed at establishing its own satellite constellation.
Dubbed Iris², this ambitious 7 billion euro initiative seeks to equip EU member states with a sovereign, ultra-secure communication system to counter American satellite networks, such as Starlink and the upcoming Amazon Kuiper.
Italy is deeply invested in this expansive project, collaborating with national companies like Telespazio and Leonardo. Notably, Thales Alenia Space, a key partner in the initiative, is partially owned (33%) by Leonardo. Additionally, one of the three control centers for this project is set to be located in Fucino, in the Abruzzo region of Italy.
What explains this potential betrayal of European unity? Industry insiders consulted by La Lettre propose two possible scenarios. One theory suggests that the discussions with SpaceX could merely be a strategic maneuver by Rome to negotiate better terms for its domestic industries within the Iris² framework.
Alternatively, forging an agreement with SpaceX could grant Italy access to advanced American technology for five years, providing a temporary solution until the Iris² program becomes operational, currently slated for 2030.
Regardless of the path chosen, this situation arises at a particularly precarious juncture. As discussions commence regarding the European Union’s multiannual budget, the funds that Rome might allocate to the American initiative could detract from the resources available for Brussels’ satellite constellation, according to La Lettre.
Overall, the Italian deal stands to impact the burgeoning European “new space” market, which is already grappling with the dominance of Starlink in the satellite internet sector. On the French front, La Lettre highlights that Airbus Defence and Space initiated a redundancy plan last year, while Thales Alenia Space has started a reclassification program for its engineers.