PARIS โ€“ Some 18 percent of the combined value of the research contracts that Franceโ€™s arms procurement agency, DGA, signed with industry in 2004 were for space-related technology development , DGA officials said April 21.

Separately, DGA officials said they are in final negotiations with Italian defense authorities on an Italian role in Franceโ€™s Helios 2 optical and infrared reconnaissance satellite program.

The first of two planned Helios 2 satellites was launched in December and declared operational in early April. Belgium and Spain already are taking part in Helios 2, each with a 2.5 percent share of the program.

Italyโ€™s share is likely to be of a similar level, officials said, and Greece also has announced it would take a small share.

Italy and France are expected to sign a companion accord this year to permit each nation to use the otherโ€™s reconnaissance satellite capacity.

Italy is developing the Cosmo Skymed radar satellite system, whose first satellite is scheduled for launch in 2007.

Presenting the DGAโ€™s 2004 financial accounts and perspectives, DGA head Francois Lureau said space-based research accounts for 18 percent of the agencyโ€™s annual research and technology spending on contracts with industry, which in 2004 totaled 454 million euros ($586 million).

DGAโ€™s total research budget for 2004 was 1.3 billion euros, up 10 percent from 2003. That sum includes the payments to industry, plus payments to Franceโ€™s aeronautical research institute, ONERA, and to the French space agency, CNES.

In addition to launching its own operational programs in space-based observation and telecommunications โ€” the French Defense Ministryโ€™s Syracuse 3A telecommunications satellite is scheduled for launch in late May โ€” DGAโ€™s strategy has been to launch demonstrator satellites on a French-only basis and hope for broader European support later on.

The demonstrator model is being used for space-based eavesdropping, missile warning and laser communications.

Lureau said France is pushing for a sizable research budget to be managed by Europeโ€™s new European Defense Agency, which was created late in 2004 but so far has no real spending power. โ€œIt has no real budget now but we are working with our partners in Europe to give it one,โ€ Lureau said.

Peter B. de Selding was the Paris bureau chief for SpaceNews.