How will NASA's budget cuts affect Europe?
The EU-US relationship may never be able to go back to the way it was.
This newsletter was brought to you by Sonder London. We like to hear from our readers. So if you have any feedback or story suggestions, get in touch. And thanks for reading.
Good morning.
✂️ Last week, we witnessed the break-up of President Donald Trump and ‘best buddy’ Elon Musk. But with much of NASA’s funding on the chopping block, it may be the end of EU-US space relationship, too, reports Euronews:
‘NASA’s 2026 technical budget request details possible cuts to programmes such as the Laser Interferometer Space Antenna (LISA), a space probe that measures gravitational waves, Envision, ESA’s first mission to Venus to measure its different atmospheres, and NewAthena, the world’s largest X-ray observatory.
The budget also cuts funding to certain components of Moon missions after Artemis III, a mission that would bring humans back to its surface in 2027. The bill still needs to be approved by Congress, which could likely be in the autumn.
ESA said at a press conference last week that 19 of its research projects might be impacted by the proposed NASA budget cuts. The ones where mitigation would be needed are the LISA, Envision and NewAthena. Without NASA contributions to these projects, the missions might “slip years,” possibly pushed back “well into the 2030s,” and risk cancellation.
The questions that these three missions address, like the mergers of black holes, hot-plasma physics and the history of Earth-size planets, would “remain unanswered for at least a decade.” There are also possible impacts for Europe’s Moon mission aspirations, because if the NASA cuts are approved, Europe’s “two principal avenues into the Artemis architecture would disappear”.’
🛰️ ESA is moving ahead with plans for the first phase of an Earth observation satellite system that will have both civil and military uses, reports Space News:
‘The initial focus of ERS will be development of a satellite system able to provide frequent high-resolution images. That system, known as the Earth Observation Government Service (EOGS), is a high priority for the European Commission, and Aschbacher mentioned last month that ESA would work with the commission on such a system.
Aschbacher said the full cost of the system has yet to be estimated. Neither ESA nor the Commission have disclosed specifics about the constellation, including the number of satellites it requires or goals for both spatial and temporal resolution.
He said the approach to the constellation will be like Copernicus, the civil Earth science satellite system run jointly by ESA and the European Commission. ESA will be responsible for the initial development, with the EU funding later phases. The European Commission is currently limited in what it can fund regarding new space systems until its next multiannual financial framework, a seven-year plan, begins in 2028.’
🇵🇹 Airforce Technology reports that SAR satellite powerhouses ICEYE are now working with the Portuguese Air Force to boost the nation’s defences:
‘ICEYE has partnered with the Portuguese Air Force to deliver a synthetic aperture radar (SAR) satellite to boost the country’s space-based defence capabilities. As part an agreement between the partners, ICEYE will also provide a ground segment, and an antenna.
The transaction is part of ongoing discussions that may lead to the Portuguese Air Force procuring additional satellites from ICEYE in the future. This move aligns with the Air Force’s strategic objectives to enhance its capabilities.
ICEYE CEO and co-founder Rafal Modrzewski said: “We are very proud to collaborate with Portugal in strengthening Europe’s defence and disaster relief capabilities. This partnership underscores our commitment to providing critical ISR infrastructure and advancing sovereign space technologies within the region.”’
📈 And against a backdrop of general economic misery, the UK’s aerospace, defence, security and space sectors added £42.2 billion to the UK economy in 2024, according to new data from ADS, equating to a 64 per cent increase over the last decade:
‘The industries – explicitly recognised as Growth Sectors in the UK Government’s forthcoming Industrial Strategy – have also seen turnover reach £100 billion, an increase of 57% since 2014.
The data from the representative body for the industry also highlights that employment has grown a third, with 443,000 people now directly employed in well-paid jobs across the UK. Two thirds of jobs are outside of London and the Southeast, with productivity 42% higher than the UK average. Figures also demonstrate a strong pipeline of young talent across all four sectors, with 26,200 apprenticeships playing a crucial role in the workforce.
Kevin Craven, CEO of ADS Group, commented: “Against an increasing backdrop of geopolitical instability, the UK’s aerospace, defence, security and space sectors remain the industrial bedrock of our advanced manufacturing landscape. In what is our most fruitful economic outlook to date – reflecting contributions of over £42 billion to the UK economy and employing over 440,000 people across the UK – our sectors remain central to the prosperity and security of our nation.”’
💰 In The Next Web, Bogdan Gogulan, Managing Partner of space-focused private equity NewSpace Capital, argues space startups are pivoting for defence – and that it’s not a trend but ‘a transformation in space and space investment’:
‘Companies that once prioritised commercial applications, or at most maintained dual-use business models, are now making full-scale pivots to defence. Needless to say, that move isn’t random. It’s the product of geopolitical changes, such as the ongoing conflict in Ukraine, and a widespread belief that the world is changing. As Michael Gove, who served in the Cabinets of four British prime ministers, put it recently: “The ideal of a rules-based international order, where multilateral institutions restrain states pursuing their self-interest, has proved to be a false hope… we are back to a world closer to that of Thucydides in which the strong do what they can and the weak suffer what they must.”
The change is happening at the public sector level, too. In 2024, global governmental expenditure on space programmes surged to $135 billion (€119 billion) — up 10% from the year before. The primary driver was rising defence budgets. A recent Bruegel report concluded that without support from the United States, “Europe could need 300,000 more troops and an annual defence spending hike of at least €250 billion” to keep the continent safe. As geopolitical tensions rise, governments worldwide have been funnelling money into space-based defence technology, a recognition that the sector is the cornerstone of any modern military.
One of the unintended yet highly beneficial consequences of this shift among startups is its impact on the private space sector. Increased defence investment is breathing new life into aerospace and deep-tech innovation. Companies that previously struggled to secure commercial funding are now benefiting from sustained government investment, allowing them to work on cutting-edge technologies. These include (among many others) optical communications, needed for secure and high-speed space-based data transmission; Earth observation, crucial for climate monitoring, disaster response, and resource management; and synthetic aperture radar (SAR), enabling all-weather, day-and-night imaging capabilities with high precision.’
☀️ And finally, Proba-6 satellites flew in perfect formation to block the Sun and the create the first artificial solar eclipse: