Estonia looking for 'peaceful' solution with France on IT agency

Mr Pomerants says his country is not bidding "against" France, but is trying to find "common ground" and avoid a vote in the EU Council of Ministers, which would divide countries into two camps over the matter.

"I hope we arrive to a common proposal with our French colleagues – they visited Tallinn and we are continuing talks until there is a peaceful solution, a European one," he said.

France is bidding because two European databases - the Schengen Information System and the upcoming Visa Information System - are already located in Strasbourg.

But the Estonians point to the fact that a third one, Eurodac – storing fingerprints of asylum seekers and irregular migrants – is based in Luxembourg and that many companies such as Microsoft or Google have servers and databases scattered all over the world.

France already hosts four EU agencies, and a series of European institutions are already based in Strasbourg.

No deal yet

"We have already found common ground and negotiations should end soon, so that headquarters flag is in Tallinn, but the data centres are still kept in Strasbourg," Mr Pomerants said, pointing to the likely compromise.

The 1.4-million-strong Baltic country was subject to a large-scale cyber-attack in 2007, which paralysed government works and the banking system. Mr Pomerants argues this experience has made Estonia more aware and prepared to counter potential future attacks.

The Estonian government has also set aside around €17 million for the new agency's headquarters and support team. Tallinn denied reports over the weekend that a deal had been struck, but if agreement is reached this year, the agency should be up and running in 2012.

A spokesman for the French embassy also said it was still "too early" to speak about an agreement.

Costly delays

The decision to set up the new agency was prompted by the never-ending saga of the new Schengen Information System (SIS 2), which was supposed to have been operational in 2007, but is now projected to come online in the first quarter of 2013.

The development of SIS 2, contracted by French company Atos, was delayed due to quarrels among member states, the European Commission and the European Parliament over the sort of data that should be collected in the new system.

The SIS 2 system should be able to store over 70 million records ranging from fingerprints to stolen passports and car licence plates. The commission, responsible for the management of the system, has upped its cost estimate to over €100 million.

Member states, who must develop their national systems to be plugged into the main database, are also running into supplementary costs of hundreds of millions of euros.

"A case such as SIS 2 is one of the reasons why we talk today in the EU about an agency responsible for such as specific an area as IT systems, instead of the European Commission, which has hundreds of other issues on its hands," Mr Pomerants said.