The final decision was made sometime in December 2020, probably in the seventh meeting in which representatives of the EU Commission, EU Parliament and member states negotiated the details of the future EU recovery fund. Despite Corona, the negotiators met in person in Brussels – albeit always in large halls with a lot of distance. It was the German diplomat Michael Clauss who, on behalf of the member states, rebuffed the representatives of the European Parliament.
No, with the newly launched special budget of more than 700 billion euros, the information on all recipients of the funds should not be listed in a “publicly accessible database”, as desired by the MEPs.
Led by Germany – which held the so-called Council Presidency at the time – the member states even resisted the requirement to collect and store information about the beneficiaries in a uniform data format – something that the EU Commission actually considered “crucial” to control the flow of funds and be prepared to fight fraud.
The Brussels recovery fund is the most extensive subsidy pot in EU history, the EU Commission speaks of the “biggest economic stimulus package of all time”. Institutions, organizations and companies from Lapland to Andalusia should benefit from it. According to estimates by the Federal Court of Auditors, German taxpayers will make a particularly large contribution to filling this pot with an estimated net contribution of at least 65 billion euros.
There are legion of cases in which EU subsidies have trickled away or even been misappropriated in the member states in the past. So why didn’t the federal government want transparency?
WELT has now researched the background to the decision at the time together with other European partner media who are involved in the project
One thing is certain: the German diplomat Michael Clauss, as the permanent representative of the Federal Government to the EU, carried out the guidelines that he received from the Federal Ministry of Finance – at that time led by today’s Chancellor Olaf Scholz (SPD). And that said: No to more transparency. Why? The ministry does not want to reveal it today under the leadership of Christian Lindner (FDP).
Internal correspondence that is available to WELT provides more information. They show that with its veto against more transparency at the end of 2020, the then coalition of CDU/CSU and SPD ignored massive concerns even from leading MEPs from the CDU and CSU.
Without a digital reporting and monitoring system, the EU Commission would have no chance of “tracking the use of the funds” for the recovery fund, MPs Monika Hohlmeier, Marlene Mortler and Christine Schneider complained in a letter to the then German newspaper on December 15, 2020 Agriculture Minister Julia Klöckner (CDU).
As Chair of the Budget Control Committee, CSU politician Hohlmeier was able to see the difficulties the Commission had in creating a list of the 50 most important recipients of EU funds in previous years – because the member states did not provide the data. In the letter to Klöckner, Hohlmeier and her colleagues also mentioned the case of the billionaire and then Czech Prime Minister Andrej Babis, who is said to have received annual EU subsidies in the tens of millions with his Agrofert Group.
Nevertheless, according to Hohlmeier and Co. in their letter, the federal government is blocking reforms for more transparency: “Unfortunately, the German Council Presidency continues to vehemently oppose the creation of a solid legal basis for the introduction of such an IT system and has so far blocked every compromise proposal by Parliament categorically,” complained the deputies in December 2020.
Minister Klöckner replied in March 2021 (“Dear Monika, dear Christine, dear Marlene”) and referred to “compliance with data protection regulations” and an allegedly “disproportionately high administrative burden” of the tool called Arachne. The three MEPs replied to the Berlin politician that digitized administrative procedures tended to be “less bureaucratic”.
In fact, the federal government has blocked the use of the data tool to this day. Germany “is currently examining the use of the Arachne system as one of several possible control systems,” the Ministry of Finance announced in April 2022. There are still “questions about ensuring adequate data protection”.
During the negotiations in Brussels at the end of 2020, the Berlin negotiators also apparently blamed others for the transparency blockade. “The federal government also referred to resistance from individual federal states,” recalls German MEP Damian Boeselager from the Volt party, who represented the Greens parliamentary group in the negotiations in the so-called trilogue process with Ambassador Clauss.
Commission representatives also want to have heard something similar from Clauss. The name of the state of Bavaria is said to have been mentioned – as an obstacle to more openness and a Europe-wide uniform data format when transmitting the recipient names.
The Bavarian Ministry of Finance expressly did not confirm this at the request of WELT: “We are not aware that there was resistance from Bavaria to the publication of the names of the recipients,” wrote a spokeswoman. On the contrary, the Bavarian state parliament demands transparency here.
The Ministry of Finance of North Rhine-Westphalia announced that the proposal for a public database with the names of recipients was “not known” at all. However, it is also said behind closed doors that there are also officials in the federal states who fear too much control by Brussels.
Originally, however, even French President Emmanuel Macron had promised that information about the beneficiaries of the fund should be publicly available so that citizens could track the flow of money. He said that in September 2020 – three months before the German Council Presidency collected this announcement again. Looking back, MEP Boeselager sees a typical reflex of the governments of the member states at work: “It works according to the principle: don’t look into my cards, then I won’t look into your cards so deeply. This means accepting that corruption will occur.”
Today it is clear: Only a few governments are planning to voluntarily publish the names of the beneficiaries of the monster fund with its more than 700 billion – including Lithuania, Romania, Slovakia and at least part of Spain, possibly also Finland and Sweden.
Lawyer and transparency expert Krzysztof Izdebski from the Open Spending EU Coalition is currently observing a worrying trend. Increasingly, the recipients of taxpayers’ money are being denied, citing EU data protection law – as if receiving public funds was part of private life. Izdebski believes that those who receive public money “should not have the right to do so in secret”.
So it’s not that unthinkable to name horse and rider. At times – in March 2021 – the federal government had apparently also planned such a publication. This is also evident from internal documents available to WELT. Fund recipients in Germany would have to “agree to information about them being published in a list of projects,” Commission officials quoted from a German draft paper in an email dated March 17, 2021. In the federal government’s document, the following was added in square brackets: “All departments: please initiate in the respective ministry and check implementation.”
This test then obviously ended with a negative result. Why? And hasn’t the federal government taken into account the role model function that a possible German transparency offensive could have had, also with a view to the very large sums that are being spent here across the EU? The Ministry of Finance does not want to answer these questions either.
The authority also reacts tight-lipped when, on the basis of the Freedom of Information Act, you ask for access to the lists of recipient names that Berlin is required to draw up under EU law. First, such a list does not yet exist, the Treasury Department replied on April 13. Even if there were, the data should be “competitively relevant” – and “therefore also in need of secrecy,” added Lindner’s people.
Experts do not immediately understand why information about the allocation of tax money should be relevant to competition and need to be kept secret – especially since the annual EU agricultural subsidies for farmers already have to be made public today, down to the cent amounts after the decimal point. The lawyer and freedom of information expert Christoph Partsch, who also regularly represents WELT, says: “The notification from the ministry shows that the interest in transparency is being turned into its opposite by the administration.” “Stricter rules are urgently needed against officials acting illegally”.
Criticism also comes from the chairman of Transparency International Germany, Hartmut Bäumer. “Not to indicate who the recipients of the funds are, that is highly problematic,” said Bäumer WELT: “We need a lot more transparency, especially in the EU.”
The Hungarian economist Mihály Fazekas also advises the publication of recipient names. The Vienna-based researcher had examined programs in which member states use EU funds – and discovered “a higher risk of fraud and corruption” than with comparable national funds.
This applies in particular to programs such as the EU development fund, where the money should flow out quickly. When it comes to EU funds, the hand is more relaxed, because in the member states they are not considered “hard-earned taxpayer money”, according to Fazekas.
This realization does not seem to have arrived in Berlin yet. Left-wing MP and budget expert Victor Perli recently had negative experiences with the Ministry of Finance. He wanted to know which companies had received funds for projects from the “Automotive Industry Future Fund” and from a “Future Investment Program for Vehicle Manufacturers”.
Both ran partly in parallel with support programs from the EU fund. In response to Perli in March, the Ministry of Finance listed 239 pages of payments to companies such as BMW, Daimler and VW. However, the ministry declared the list as “classified information – for official use only”.
“This secrecy is absurd,” says Perli. Citizens have “a right to know the recipients of public funding”.
In January, the Federal Ministry of Research was more open about the distribution of the 591 million euros that – financed by the EU development fund – went to three developers of corona vaccines in Germany. Accordingly, Biontech received around 375 million euros, Curevac around 196 million and IDT Biologika around 20 million euros.
The Treasury, on the other hand – that has earlier research by
And: The federal government is also lagging behind in other joint efforts to improve financial control of the EU development fund. As early as October 2021, the EU police authority Europol launched the Sentinel initiative – a project in which 19 member states want to “proactively” share information about possible fraud risks with each other.
Germany was not one of these 19 member states. The federal government has only been involved since the beginning of April 2022, almost half a year late. “Germany only recently joined,” confirmed a Europol spokesman when asked by WELT.
The head of the EU anti-fraud authority Olaf, Ville Itälä, had already criticized the veto of some member states – like Germany – against the mandatory use of the Arachne system a year ago. The EU development fund is associated with major fraud risks. These would now be increased – because this control system was not made mandatory.
In a resolution last Thursday, the EU Parliament once again expressly regretted that the member states “rejected the establishment of an online platform for the publication of final beneficiaries, supported by Parliament and the Commission” – and warned “that uncovering the misuse of EU funds will be made more difficult without proper monitoring”.
Among the members of the team of
Staffan Dahllöf (DEO.dk, Denmark/Sweden), Marcos Garcia Rey (frei, Spain), Ada Homolova (Follow the Money, Netherlands), Gabi Horn (Atlatszo, Hungary), Jarno Liski ((Iltalehti, Finland), Piotr Maciej Kaczynski (Onet.pl, Poland), Ante Pavic (Ostro, Croatia), Giulio Rubino (IRPI, Italy), Adrien Sénécat (Le Monde, France), Peter Teffer (Follow the Money, Netherlands), Hans-Martin Tillack (WELT , Germany), Petr Vodsedalek (Denik, Czech Republic), Ben Weiser (Zackzack, Austria), Lise Witteman, (Follow the Money, Netherlands), Matej Zwitter (Ostro, Slovenia)