Cern eyes loan

Cern, the Geneva-based particle physics laboratory, is thinking of taking out a loan to ensure completion of its key particle-smashing project, the Large Hadron Collider.

The need for the money - possibly as much as Pounds 200 million - stems from a recent demand from Germany, one of the Cern member states, for an 8.3 per cent cut in its subscription to the laboratory.

Delegates at a Cern meeting last week had little sympathy for Germany's argument that it needed the cut to help with the spiralling costs of reunification. Many delegates believe that Germany's move is more inspired by the need to rein in its public expenditure in preparation for the single European currency.

Germany insists that its position is non-negotiable, while other Cern member states are refusing to make any concessions, pointing out that Germany has already had 10 per cent of its contribution sliced off to help meet the costs of reunification, in an agreement that runs to 1998.

The meeting concluded with Cern agreeing to set up a committee to examine ways of ensuring that the LHC programme continues on schedule for completion by 2005. A budget cut could force Cern to delay completion at further cost. Cern's annual budget totals about Pounds 500 million. The LHC programme will take the lion's share of the Cern budget over the next few years.

The new committee may have to consider how, given Germany's stance, Cern can best stretch out paying for the LHC while staying on schedule for completion.

A commercial loan was mooted by several delegates last week. Cern officials pointed out that some "savings" on projected spending had already been made over the past two years through a combination of low Swiss inflation and a strong Swiss Franc. Taking these savings into account, sources estimate that a loan of Pounds 150-200 million might be needed to ensure the LHC's completion on time. But delegates, especially the British, stressed that a loan must be the very last resort.