TEHRAN The European Union is to launch an intelligence service, in an effort to counter the American economic espionage program 'Echelon', a member of the European Parliament told the German daily ***** Junge Welt ****.

The German member of the European Parliament, Ilka Schroeder of the Green Party, referred to the latest report by the espionage committee, calling for the formation of a European intelligence service to protect European industries against U.S. espionage.

"It's hypocritical for the Parliament to criticize the U.S. Echelon surveillance techniques, while there are plans in work to promote a European secret service," Schroeder was quoted by IRNA as saying.

A recent report by the European Parliamentary Committee confirmed the existence of a controversial worldwide espionage network 'Echelon' which has caused between $13 and $145 billion in financial damages to European companies.

The study, presenting evidence that intelligence services from the U.S., Canada, Australia, New Zealand and Great Britain are parts of 'Echelon', called on European firms to guard themselves from this ultramodern form of economic espionage.

The United States had in the past repeatedly denied the existence of 'Echelon' which is reportedly capable of eavesdropping on every single telephone call, radio transmission, fax or E-mail message around the world.

U.S. officials had refused to meet with a visiting European parliamentary delegation a few weeks ago, wanting information on 'Echelon'.

A member of the EU Parliamentary Committee, Gerhard Schmid said the evidence, consisting of photos, statements by intelligence officials working on the project and the results of Internet research-proved conclusively and without a doubt that this was in fact the case.

"Companies outside Europe getting hold of this information might gain huge advantages," Schmid added.

The study suggested advanced coding techniques for companies when transmitting confidential messages.

Schmid also referred to the close cooperation between the intelligence services of the U.S. and EU member Great Britain, saying it might have serious repercussions for the EU's common foreign and security policies if the issue was not discussed.

The worldwide espionage installations of 'Echelon', were created in 1947 and initially used for military purposes.