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I think the core of the question here is - do those funds bring any kind of return or are they one of thefriends of friends get handouts from government type projects that ultimately don't generate anything outside corruption and paperwork.

Note: It is not NLnet Labs, but NLnet [0] to which is delegated. They are not the same.

[0] https://nlnet.nl

> The EU doesn’t take decisions directly about which projects to fund, but instead delegates it to more knowledgeable organizations.

They very much do. They invite volunteers to review applications and serve on juries for EIC and ERC, but the entire process, including definition of the funding criteria, is run by the EU.

You’re right, it’s a mix of both.