Why is Olaf Scholz announcing higher taxes?

SIf the SPD wins the next federal election, its candidate for chancellor wants Olaf Scholz Tax top earners higher. He leaves open how much more “the rich” should pay. Likewise the question of who is rich at all. The Federal Finance Minister of the “Rheinische Post” just said literally: “In view of the many tasks that the state is shouldering now, it must be clear that people who earn a few hundred thousand euros can make a higher contribution to the financing of the community in the future.”

In purely theoretical terms, it is therefore possible for couples with a joint taxable income of more than 200,000 euros to be affected. Perhaps Scholz was only thinking of single earners over 900,000 euros. Maybe he’s thinking of socialist marginal tax rates of 80 percent, maybe just a hundred euros more per year. One does not know.

Because it can be assumed that a federal finance minister knows the marginal rates of progressive income tax and the federal financial needs, Scholz could of course have expressed himself more precisely. Above all, the fact that he didn’t do it shows that it doesn’t depend on the specific euro. Rather, the direction must be right.

A year before the Bundestag election Olaf Scholz makes it clear: the wealthy should pay more in the future!

There are many reasons for that. Some are political in nature. The SPD strives for a red-red-green alliance after the election. Both the Left and the Greens are known to have nothing against higher taxes – especially not if they hit “the right people”. Scholz, who is considered a pragmatist to a conservative in his party, must also take over his own troops from the left. And last but not least, the SPD needs a topic with which it can both differentiate itself from the Union and mobilize its own people. And of course the voters.

Will “More Justice” Draw This Time?

With higher taxes and “more justice” it did not work out in the last two election campaigns. As with any crisis, the Corona-Crisis many people emerge as losers. Millions are on short-time work, hundreds of thousands became unemployed or had to close their businesses forever. Perhaps, given the misery, voters are now more receptive to the message?

There are, however, also economic reasons why the comrades want those with high incomes to get their wallets. At the beginning of July Bundestag passed the second supplementary budget, according to which the federal government alone will incur additional debt of 217.8 billion euros this year – a record.

Just two weeks ago, Scholz also stated that he firmly expected that the debt brake could not be adhered to in the election year because of the Corona crisis. In this respect, it should be noted that there are high debts that have to be serviced and, in the best of cases, someone has to repay them.

But how did Olaf Scholz say at the end of March when he brought the first supplementary budget with a net borrowing of 156 billion euros into the Bundestag: “We can afford it.”

Now, five months later, the Social Democratic Vice Chancellor sounds different: “Pragmatic politics does not mean that top earners are spared and therefore incurs additional debts.”

If you want to make it easy for yourself, you forget the optimism of the end of March, tune in to the SPD’s song and state that only the rich are left.

But that jumped too short. According to the Ministry of Finance, there are almost 40 different types of tax in Germany, from beer tax to energy taxes, from VAT to income tax, from dog tax to property tax. In this respect, it is possible to demand a higher income tax for top earners. But there is no alternative to it.

Above all, no one should regard the federal government’s exorbitantly high levels of new debt as inevitable. Compared to other countries, Germany is getting through the crisis well.

Nonetheless, the impression arises that many billions are being spent all too carelessly. To name just three examples: Why does the state really have to subsidize every electric car with 6,000 euros? Does it make sense to extend the short-time work allowance now until the end of next year? Does the European reconstruction fund really have to be worth 750 billion euros, of which just 30 billion euros come to Germany?

As early as May, the CDU budget politician Eckhardt Rehberg warned in the FAZ: “Even in this crisis there must be no abuse and indiscriminate distribution of money.” He is right. Because all experience teaches: the bill comes.

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AKK on the Corona demo in Berlin: I’m really angry

Mit Wut hat CDU-Chefin Annegret Kramp-Karrenbauer responded to pictures of aggressive demonstrators with Reich flags on the stairs of the Reichstag building in Berlin. “I have to say, I’m really angry about that and about the pictures you saw there. The fact that the Reich flag is waving again at the German Bundestag is something that is unbearable, ”said the CDU chairwoman in a statement that the party spread on Sunday.

Union parliamentary group leader Ralph Brinkhaus told the dpa: “The scenes that played out on the stairs of the Reichstag building on Saturday are equally shameful and worrying. A limit was crossed. The new escalation level shows us that we have to think again about protecting Parliament. “He thanked the police officers,” who have resolutely opposed this crossing of the border. “

Bundestag Vice President Wolfgang Kubicki has sharply criticized the demonstrators who stormed the stairs of the Reichstag building on Saturday. “It makes no sense to first fight for the right to demonstrate in court and then to storm the Reichstag – the heart of democracy,” said the FDP politician on Sunday to the German press agency in Berlin. “I don’t understand that barricades are broken and rule breaks are celebrated. Our democracy lives from the fact that controversial positions can be carried out peacefully and rule-based. “Kubicki thanked the police officers,” who prevented worse things.

The SPD leader Saskia Esken did the same. “Our thanks go to the police officers who turn their heads for our democracy and thus prevent the worst,” said Esken of the Düsseldorf “Rheinische Post”. “Democracy and the rule of law are defensible.” The extensive image and sound material must now be used for seamless investigation and prosecution, demanded Esken. “Anyone who instead describes this demonstration, its organizers and its drivers as ‘Corona skeptics’, who belittles the Reichstag strikers as ‘childish screaming chaos’, has not understood or does not want to see the danger posed by this transverse front,” said Esken.

The group leader of the AfD in the Bundestag, Alice Weidel, said: “It is unacceptable that some chaos after the peaceful Corona– Demonstration in Berlin having broken the police barriers in front of the Reichstag. This behavior is just as wrong as the abuse of the Reichstag by Greenpeace activists for their propaganda a few weeks ago, ”she said on Sunday. “The building stands for the parliamentary debate in the plenary chamber and must not be misused as an object of political disputes on the street – regardless of which side.”

The initiator of the demonstration and rally, Michael Ballweg, has distanced himself from the demonstrators at the Reichstag. Ballweg from the initiative lateral thinking 711 said on Sunday that he distanced himself from those who demonstrated at the Reichstag. “They have nothing to do with our movement.” Lateral thinking is a peaceful and democratic movement, violence has no place there. He does not understand why the Berlin Senator for the Interior Andreas Geisel (SPD) “does not have the appropriate police forces to counter such actions” – especially since these were known beforehand, Ballweg said. “Why isn’t he able to protect the building?”

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“That would be neoliberalism”: Scholz rejects the idea of ​​a basic income

The idea of ​​an unconditional basic income also has supporters in the SPD, but they are at a losing position. Chancellor candidate Scholz makes it clear that the project cannot be done with him.

SPD chancellor candidate Olaf Scholz strictly rejects the introduction of an unconditional basic income. “That would be neoliberalism,” said the Federal Finance Minister to the newspapers of the Funke media group. He has always considered the idea of ​​an unconditional basic income to be wrong. This would jeopardize many of the welfare state’s achievements such as pension or unemployment insurance, warned Scholz. Such a reform would also be priceless if the calculations were “fair and correct”.

The association Mein Grundeinkommen had this week together with the Berlin economic research institute DIW and other institutions a multi-year pilot project on the effects of an unconditional basic income initiated. 120 participants should each receive 1200 euros per month for three years, without this being tied to certain conditions. According to the association, the participants do not have to prove any need and can earn unlimited additional money.

Scholz also announced in the interview that he would not sign a coalition agreement after the federal election that would not include a higher minimum wage. He called an increase to twelve euros an hour “urgently needed”. In Germany there are many jobs “in which those who do heavy physical work are not paid fairly”. At the beginning of July, the minimum wage commission recommended an increase from the current EUR 9.35 to EUR 10.45 in four stages by 2022.

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ARD “Germany trend”: Scholz a good candidate for SPD chancellor?

The SPD wants to run next year with Scholz at the top in the federal election. According to a new survey, he has not yet received the approval of his two predecessors Martin Schulz and Peer Steinbrück.

According to a survey, 44 percent of the population think so Olaf Scholz for a good SPD chancellor candidate. On the other hand, 30 percent disagree, as can be seen from the latest “DeutschlandTrend in ARD morning magazine”. 26 percent can therefore not judge Scholz, do not know him or give no information. According to the information, Scholz does not achieve the popularity of his two predecessors with the values Martin Schulz and Peer Steinbruck at the time of their nomination. The SPD wants to run with Scholz at the top in the 2021 election.

If the general election were on Sunday, the CDU and CSU would get 37 percent of the vote, the Greens 17 percent, the AfD 10, the Left 8 and the FDP 6 percent. Compared to the Germany trend of August 6, the SPD and the Left win one point each, while the Union, AfD and Greens lose one. The FDP remains unchanged.

Meanwhile, given the rise in new corona infections in the population, fear of infection is increasing. 34 percent currently express very great or great concerns that they or family members could be infected with the virus. 66 percent are currently only slightly concerned or not at all.

For the “Deutschlandtrend” on behalf of the ARD “Morgenmagazin” the opinion research institute Infratest dimap asked 1,065 voters in Germany on Tuesday and Wednesday. The margin of error is 1.4 with a proportion of five percent and up to 3.1 with a value of 50 percent.

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CSU criticizes the SPD’s strict left-wing course: Left coalition?

NAfter the push by the SPD leadership duo to form a coalition with the left after the federal election, criticism comes from the current coalition partner. CSU General Secretary Markus Blume told the “Bild” newspaper that SPD was on a “tight left course” instead of talking about “the Groko’s successes”. “With its left-wing reverie in the midst of a global recession, the SPD proves why it only knows the way down in surveys.”

On the weekend both had Saskia Esken and Norbert Walter-Borjans, who were elected to head the Social Democrats eight months ago, openly for a coalition with the Left Party. “We want to paint a clear picture of a fairer future that exudes great respect for people and promises many a better future,” said Esken on Sunday in the ARD “summer interview”.

She even brought an alliance under a green chancellorship into play. “It’s not about vanity. It’s about making good politics for the people in the country, and the SPD is ready to take on such a responsibility. ”Esken also indicated that her party will continue to overdo it against the background of the social pressures caused by the Corona crisis a royalty for the super rich ponder.

FDP: Those who are ready to perform will no longer find a home with the SPD

“Employees who are willing to work will no longer find a political home with the SPD,” said FDP General Secretary Linda Teuteberg, “with whichever candidate for Chancellor”. Finance Minister currently applies Olaf Scholz, who stands for a business-friendly course with social elements, as the most likely candidate for Chancellor of the SPD.

It is now clear “that the election campaign will be about more or less taxes and about a state capable of acting under the rule of law or areas free from the law”, so Teuteberg. Those who vote for the SPD or the Greens will “wake up with red-red-green,” she warned.

Before that, Esken’s co-chairman Walter-Borjans had shown himself to be fundamentally open to talks with the Left Party. The SPD wants to become the leading force in a government alliance that focuses on social cohesion. “The grand coalition is not the basis for this. If we ruled out an alliance option with the left, the defenders of the ‘business as usual’ and thus the further division of society would have won, ”he told the newspapers of the Funke media group. Vice Chancellor Olaf Scholz, parliamentary group leader Rolf Mützenich and Esken would also see it that way. “But there would certainly still be enough need for clarification. As with the Greens, ”said Walter-Borjans.

Left boss Katja Kipping had previously stated: “In order to implement the necessary socio-ecological changes, we are ready to go to a federal government. For this we need social majorities on the left of the Union. “

Greens versus “boring color debate”

The Greens initially reacted cautiously to the SPD initiative. Federal Managing Director Michael Kellner said that ARD‘Coalition issues should come at the end of an election campaign and not now, when it begins. First of all, it is about a competition for the best ideas, not a “boring color debate”.

For the SPD, an alliance beyond a grand coalition would currently be, if at all, above all in an alliance with the Greens and Left Party conceivable. With her statement about a green chancellorship, Esken probably takes into account the current situation that the Greens are ahead of the Social Democrats in polls. Esken told the ARD that she was sure that the SPD would succeed in making an offer to a large number of voters.

The party leader confirmed the efforts of the SPD to quickly clarify the question of the SPD’s candidacy for chancellor. But even if numerous party colleagues are already loudly advocating Olaf Scholz in this position, she did not want to commit to this issue either. “Olaf Scholz is an excellent Vice Chancellor. And I think a lot of people are happy that we have such a capable and experienced finance minister at the head of the government. ”But the deliberations have to be carried out“ to a good end ”before the public is informed, she said in the“ summer interview “.

With a view to the corona pandemic and the resulting social responsibility, Esken once again took up the SPD’s call to change blatant income differences. In this context, Esken had already brought a one-off property tax for the super-rich into play. The party has not yet decided when this tax should take effect. “This is about very, very high wealth, but we are not finished with the definition,” explained the SPD leader.

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CSU criticizes the SPD’s strict left-wing course: Left coalition?

NAfter the push by the SPD leadership duo to form a coalition with the left after the federal election, criticism comes from the current coalition partner. CSU General Secretary Markus Blume told the “Bild” newspaper that SPD was on a “tight left course” instead of talking about “the Groko’s successes”. “With its left-wing reverie in the midst of a global recession, the SPD proves why it only knows the way down in surveys.”

On the weekend both had Saskia Esken as well as Norbert Walter-Borjans, who had been elected to head the Social Democrats eight months ago, openly for a coalition with the Left Party. “We want to paint a clear picture of a fairer future that exudes great respect for people and promises many a better future,” said Esken on Sunday in the ARD “summer interview”.

She even brought an alliance under a green chancellorship into play. “It’s not about vanity. It’s about making good politics for the people in the country, and the SPD is ready to take on such a responsibility. ”Esken also indicated that her party will continue to overdo it against the background of the social pressures caused by the Corona crisis a royalty for the super rich ponder.

FDP: Those who are ready to perform will no longer find a home with the SPD

“Employees who are willing to work will no longer find a political home with the SPD,” said FDP General Secretary Linda Teuteberg, “with whichever candidate for Chancellor”. Finance Minister currently applies Olaf Scholz, who stands for a business-friendly course with social elements, as the most likely candidate for Chancellor of the SPD.

It is now clear “that the election campaign will be about more or less taxes and about a state capable of acting under the rule of law or areas free from the law”, so Teuteberg. Those who vote for the SPD or the Greens will “wake up with red-red-green,” she warned.

Before that, Esken’s co-chairman Walter-Borjans had shown himself to be fundamentally open to talks with the Left Party. The SPD wants to become the leading force in a government alliance that focuses on social cohesion. “The grand coalition is not the basis for this. If we ruled out an alliance option with the left, the defenders of the ‘business as usual’ and thus the further division of society would have won, ”he told the newspapers of the Funke media group. Vice Chancellor Olaf Scholz, parliamentary group leader Rolf Mützenich and Esken would also see it that way. “But then there would certainly still be enough need for clarification. As with the Greens, ”said Walter-Borjans.

Left boss Katja Kipping had previously stated: “In order to implement the necessary socio-ecological changes, we are ready to go to a federal government. For this we need social majorities on the left of the Union. “

Greens versus “boring color debate”

The Greens initially reacted cautiously to the SPD initiative. Federal Managing Director Michael Kellner said that ARD‘Coalition issues should come at the end of an election campaign and not now, when it begins. First of all, it is about a competition for the best ideas, not a “boring color debate”.

For the SPD, an alliance beyond a grand coalition would currently be, if at all, above all in an alliance with the Greens and Left Party conceivable. With her statement about a green chancellorship, Esken probably takes into account the current situation that the Greens are ahead of the Social Democrats in polls. Esken told the ARD that she was sure that the SPD would succeed in making an offer to a large number of voters.

The party leader confirmed the efforts of the SPD to quickly clarify the question of the SPD’s candidacy for chancellor. But even if numerous party colleagues are already loudly advocating Olaf Scholz in this position, she did not want to commit to this issue either. “Olaf Scholz is an excellent Vice Chancellor. And I think a lot of people are happy that we have such a capable and experienced finance minister at the head of the government. ”But the deliberations have to be carried out“ to a good end ”before the public is informed, she said in the“ summer interview “.

With a view to the corona pandemic and the resulting social responsibility, Esken once again took up the SPD’s call to change blatant income differences. In this context, Esken had already brought a one-off property tax for the super-rich into play. The party has not yet decided when this tax should take effect. “This is about very, very high wealth, but we are not finished with the definition,” explained the SPD leader.

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Top meeting of the federal government on the Lufthansa rescue

ÜA state-of-the-art crisis meeting is scheduled for early next week about state aid for the battered Lufthansa. Chancellor Angela Merkel (CDU), Finance Minister Olaf Scholz (SPD), Minister of Economy Peter Altmaier (CDU), Minister of Transport Andreas Scheuer (CSU) and Lufthansa CEO Carsten Spohr want to negotiate a rescue package. This was reported by the DPA news agency. The “Bild” newspaper had previously reported that such a top meeting was planned shortly.

The bailout package is worth nine to ten billion euros, government circles said. However, there is still controversy in the federal government in what form the federal government is helping Lufthansa and how much say politicians have in the event of a temporary state participation. In government circles it was said that Lufthansa should not be dragged from all sides, the situation was already dramatic enough.

Massively affected

Lufthansa is severely affected by the corona crisis. Spohr has already prepared the airline’s employees for tough times. Lufthansa is not the only airline that needs state aid.

Lufthansa competitor Air France KLM also receives massive public aid in the form of state guarantees and loans of up to 11 billion euros. France and the Netherlands hold shares in the company.

In the case of Lufthansa, the question is also what form the state could take part in. An entry as a shareholder or as a silent partner is conceivable. As the F.A.Z. reported in its Saturday edition, citing industry insiders, that the state rescue package for Lufthansa is already in place. It could be finished in the coming week.

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Startups are fighting for a Corona bailout

Hamburg, Berlin The announcement on April 1, of all things, sparked euphoria among start-up lobbyists in Berlin: finance minister Olaf Scholz (SPD) announced a two-billion-euro protective shield especially for emerging tech companies. The efforts to convince the German Startups Association, which was newly formed a few months ago, had obviously borne fruit.

But now the founding lobbyists are worried about the implementation. The association now wants to put pressure on the media again.

“We have just received confirmation that the two billion euros will not be released in the Ministry of Finance. We have therefore already decided to escalate today, to send a letter to Scholz and at the same time to start a small media campaign to increase the pressure, ”says an internal WhatsApp message with which lobbyists will get signatures on Thursday wanted to. The news is available to the Handelsblatt.

Since the beginning of the corona crisis, the start-up association around its boss Christian Miele from venture capitalist Eventures has repeatedly publicly promoted a wide range of help for the industry – including in an online press conference together with the digital representative of the federal government, Thomas Jarzombek (CDU). Now the open letter should increase the pressure.

In the letter to Scholz, the association firstly wants to praise the finance minister for “recognizing the specific needs of startups”. Now the rapid use of the “promised customized instruments is required”.

The letter ends in the appeal: “Keep your word, Minister Scholz! Release the two billion euros! ”Upon request, the association confirmed the existence of the letter, which now has 500 signatories and is expected to be published at the weekend.

“While the other auxiliary instruments have already been focused, there is still no timetable for the start-up measures,” said Christoph Stresing, managing director of the Federal Association of German Startups (BVDS). “Speed ​​is now the order of the day.”

Industry should also take risks

There are obviously good reasons for the hesitant implementation. The federal government is looking for a way to deal with the special situation of the industry. After all, the early-stage investors, who are particularly strong in the German scene, calculate their investments with failure rates of around 80 percent even in normal times. That is why the Federal Ministry of Finance wants to prevent those founders whose business idea is not viable anyway from being supported.

“The topic is complex, because we are talking about support for start-ups about equity financing, which is more likely to default than normal loan financing,” said State Secretary Jörg Kukies on Friday.

So far, the industry has preferred so-called matching. The state should increase funding rounds from venture capitalists. This is how the industry should take risks.

“We want to protect start-ups, not venture capitalists. Therefore, a promotional measure makes sense in which the venture capitalists refill their own money, which is then replenished by the state, ”said the founder of the venture capitalist Lakestar, Klaus Hommels, this week’s Handelsblatt.

However, critics doubt the selfless intentions of venture capitalists. “Why should venture capitalists be the gatekeepers for state aid?” Asks Sven Schmidt, co-founder of Hamburg investor ICS and critic of the industry. Start-ups that are financed without venture capital threaten to be excluded. In addition, the large venture capitalists in particular had earned very well in the past boom years and should not immediately ask for state aid, Schmidt criticizes.

However, the federal government expects the billion dollar umbrella to start soon. “I am confident that we can get the aid on the way quickly. We are in close and constructive exchange with the representatives of the industry to develop a viable concept, “said State Secretary Kukies.

More: Start-up investor Klaus Hommels criticizes state aid for Tui and Adidas

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Commission moves on the edge of EU law with EU bonds and grants

NAfter the summit is before the summit. This Brussels bulrush has seldom been as valid as in the times of the Corona crisis. Federal Finance Minister Olaf Scholz (SPD) stressed the approval of the video conference of the heads of state and government on Thursday evening on the 540 billion euro package to cushion the immediate consequences of the crisis, saying that the EU now had sufficient time to find a solution to the problem To develop “reconstruction”. The southern European countries from Spain via France to Italy see it differently. The head of the Eurogroup and Portuguese Minister of Finance Mário Centeno had talked to the F.A.Z. recently said that the EU had only a few weeks. The European Commission is also accelerating.

Hendrik Kafsack

The head of the European Central Bank, Christine Lagarde, warned to hurry. In the worst of three scenarios, the Eurozone’s gross domestic product could shrink by 15 percent this year, Lagarde said, summit participants said. The EU Commission is now to work on behalf of the heads of state and government to come up with a compromise in the dispute over the financing and the volume of the reconstruction fund, which can do without the controversial corona or classic Eurobonds.

After the summit on Thursday evening at the beginning of May, Commission President Ursula von der Leyen announced specific proposals on how the reconstruction fund and the multi-year EU budget 2021 to 2027 could be combined. For the first time, she explicitly mentioned the option to raise the upper limits for national contributions to the EU budget from 1.2 percent to 2 percent.

Total volume of around EUR 2 trillion

The states would no longer have to pay money into the budget. However, the EU could issue bonds to finance the reconstruction fund, which would be secured by the difference between the contributions paid and the ceiling. In other words, if the EU limits the spending of the 2021-2027 budget to about 1.1 percent of economic output as discussed, there remains a gap of 0.9 percent up to the ceiling for the national contributions that the European Commission uses to hedge its bonds could. The EU states would only have to “deposit cash” if the bond could not be serviced. The EU has calculated that the EU could raise 320 billion euros within the first three years of the 2021-2027 budget. But it shouldn’t stop there. Finally, some Member States are demanding aid of up to 1.5 trillion euros.

The European Commission is targeting a total volume of around 2 trillion euros. To put it simply, the 320 billion euros raised on the financial markets are to be “enriched” with money from the EU budget, national special contributions and private funds. For this purpose, the money is to be “leveraged” as it was with the Juncker fund: the EU would assume the main risk of projects and thus make them attractive to other investors. The 2 trillion euros come from an internal paper that has been circulating in Brussels since Wednesday and also the F.A.Z. since then.

The status of the paper is not entirely clear. A spokesman for the Leyens has denied that she knows the paper herself. However, trustworthy sources within the authority confirm that it was very well informed about the content. Until the final proposals are presented in early May, some details are likely to change. Nevertheless, the paper is instructive because it gives an insight into the options the Commission is considering to promote reconstruction.

Other reconstruction tools

This applies not least to the crucial question in addition to the financing and the amount of the fund, whether the fund only grants loans or non-repayable grants, as the Southern Europeans demand. The European Commission is therefore considering only passing on around half of the 320 billion as loans to EU countries such as Italy. The other half should flow directly into the EU budget. This would then, as is customary with the EU budget, give grants. These 160 billion euros should only be repaid after 2027 – either through EU contributions paid in by the member states or new own resources, in other words, EU taxes. The approach is delicate because it can be interpreted as EU debt, which the Community is prohibited by the EU treaties. There are therefore doubts within the Commission as to whether the Federal Constitutional Court would accept this.

For this reason, the EU Commission is probably also using other instruments in parallel to finance the reconstruction. The new euro zone budget, which the finance ministers have just approved, should also play a role. It is also expected to increase from just under EUR 20 billion to EUR 200 billion through additional national contributions, and then support the Member States in their reconstruction plans from January 1 of next year.

The Commission also plans to bring money from structural support programs 2021 to 2027 forward and focus on the first two years of the financial period to promote labor markets, SMEs and the health sector. The paper mentions a total of 50 billion euros. Because the EU Commission also includes the national own contributions required by EU law, 150 billion euros will be generated from this – as is generally the case in some of the paper “beautifully and extrapolated”, as critical Brussels voices say.

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