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Germany is a net contributor to the large EU reconstruction fund for the European economy in the Corona crisis.

Accordingly, since the July summit, at which the € 750 billion reconstruction plan was decided, the German government has insisted that the additional funds should flow into meaningful projects.

Germany, of all places, is about to disappoint expectations.

There is a lot of money involved: According to the EU Commission, Germany can expect grants of 15.23 billion euros this year, which Finance Minister Olaf Scholz (SPD) does not have to repay.

According to the current status, another 7.5 billion will flow in 2023 - the exact amount will not be determined until 2022.

The distribution of this second tranche depends on how the economy in the Member States develops up to then.

Brussels has very precise ideas about how the money should be spent: especially on climate protection and digitization.

EU budget commissioner Johannes Hahn has agreed in lengthy negotiations with national governments and parliament on how the funds will be distributed.

At least 37 percent of the money should go to climate protection and at least 20 percent to digitization.

The European Parliament will approve the outcome of the negotiations on Wednesday.

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The German population also has very precise ideas about how the money from European Corona aid should be spent.

A Europe-wide survey by the Kantar opinion research institute on behalf of the Vodafone Institute provided a list of priorities for voters: According to this, the billions are to be used primarily for healthcare, small businesses and digital education.

Voters want to improve healthcare

91 percent of those surveyed in Germany considered investments in the healthcare system to be a priority.

Help for small businesses was seen as important by 84 percent and long-term investments in digital education were seen by 82 percent of those surveyed.

Just as large is the proportion of those who want the funds from the fund to be used to secure jobs.

The federal government does not necessarily adhere to these population priorities.

On December 16, the Federal Government presented the German draft of the development and resilience plan to the EU Commission.

According to this, the federal government wants to put 42.7 percent of the funds allocated to Germany from the reconstruction fund into climate policy and the energy transition.

Another 20.3 percent should be available for digitizing the economy and infrastructure.

But only 4.9 percent should flow into the digitization of education.

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The FDP member of the Bundestag Gerald Ullrich criticizes the planned distribution.

“It is far too little if Germany only wants to spend 4.9 percent on the digitization of education from the subsidies from the EU reconstruction fund.

This does not do justice to the numerous challenges in the German education system in times of Corona, "says the chairman of the party in the European Committee.

In addition, the federal government wants to use the funds for digital education to finance measures that have already been decided.

"A large part of this is to flow into the expansion of the necessary digital infrastructures as part of the so-called education offensive, as was planned in the 2019 Digital Pact," says Ullrich.

This gives the impression that the German government is trying to use the money from the EU reconstruction fund to close the gap in the federal budget in financing digital education.

"Only a quarter for future projects"

In fact, it hurts the spirit of the Rebuilding Fund.

Member States are allowed to use the money for projects that have been decided since the pandemic outbreak in Europe in February 2020.

The Commission, which manages the money pot and assesses the national plans, stresses, however, that the money from the European fund should not replace current expenditure.

Instead, new investments should be financed that would otherwise not have taken place.

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The backward use of funds is also criticized in Brussels.

"My criticism of the German proposals is that the funds are not used for additional investments, but only replace national funds in projects," says Joachim Schuster (SPD), who sits on the European Parliament's economic committee.

"The federal government wants to spend only a quarter of the money from the reconstruction fund on new future projects," criticized the Green MEP Sven Giegold shortly after the German plans became known.

The CSU MP Markus Ferber is largely in agreement with the priorities in the German plan.

However, he is bothered by the fact that the federal government, of all people, which repeatedly demands from other countries that the Corona billions should only flow in exchange for reforms, even shy away from reforms.

“A package that relies more on reforms than just investments would certainly have sent a positive signal to other member states,” says Ferber.

The CSU politician is the spokesman for the conservative EPP Group in the Economic and Monetary Committee of the European Parliament.

"That in turn would have given the European Commission good arguments to demand more reforms from other member states."

Governments can largely decide for themselves

The problem for the MPs: The decision on the distribution of the funds from the 672.5 billion euros construction and resilience facility, the heart of the plan, is by the parliamentarians.

The Commission can determine the distribution of funds through implementing acts which the European Parliament cannot influence.

The MPs are therefore forced to build up public pressure so that the federal government can rewrite its own plans.

The Commission has apparently already criticized the plans.

The European Central Bank (ECB) recently sent a warning to the German government and other European capitals.

Their researchers had examined the effect that money from the reconstruction fund can have on European economies.

The result: If the money goes into the right investments, the Corona Plan could increase economic output in EU countries by up to 1.5 percent.

However, if it is mispredicted, the effect is practically zero.

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