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They have this information anyway if you have an EU passport or an identity card. The government app allows you to share selected properties of these documents with third parties.
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It’s not only government shares that info, the government can keep track on with which parties they shared that info and for what purpose.

As an example if I’m obliged to share my ID data via government to open a twitter account how would I know that the government would not link my twitter account to my ID and later use that info keep track of me and prosecute?

People would think that it would never happen, but not long ago that actually happened in East Germany. The Stasi kept track/files on almost every East German and this would be a digital version of the same thing

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The app is open source, and it doesn't do that.

I agree that governments should minimize collection of their citizen's data. I just don't see where it is supposed to happen in this case.

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What would you do that, they start with open source app, make the online is mandatory and once it’s established and mandated, then they closed source the app and implement data collection?

There is no guarantee that the app would stay open source and under public scrutiny forever. Governments have done way shady things in the past. Given the recent push for chat control, I would never trust anything put out by EU.

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