Summary As proposed under Article 34 of the Cloud and AI Development Act (CADA), the EuroCloud Federation (the "European public sector cloud federation") is a voluntary network for sharing public-sector data centre and cloud computing services across the EU. By letting Union entities and public-sector bodies pool and share capacity, it aims to make better use of existing public investment, reduce dependence on non-European providers, and strengthen the resilience of public-sector digital infrastructure. Participation would be voluntary, limited to public entities, and built on cost-recovery rather than commercial terms.

Detail

The EuroCloud Federation is part of CADA's strategy to strengthen the EU's cloud and AI ecosystem through cooperation between public authorities. As proposed, it is not a single, centralised cloud provider but a framework for sharing capacity between public entities. Under Article 34(1), the Federation "is hereby established" and "shall be open for the participation of Union entities and public sector bodies on a voluntary basis," with interested parties requesting the Commission to join. Under Article 34(2), it would facilitate the sharing of public-sector data centre services and cloud computing services between Union entities and public-sector bodies under the conditions in Articles 35 and 36.

Structure and scope

Under Article 34(3), the Commission would establish a platform for the Federation providing at least: a catalogue of available public-sector data centre and cloud computing services; and a service platform for the exchange and orchestration of computing, storage and network resources.

Participation would be limited to public entities. As proposed, Recital 71 states that participation should be limited to public entities "without direct participation of a private party." This keeps the Federation a tool for public-sector cooperation rather than a commercial marketplace, helping avoid distortion of competition with private operators.

Sharing of services and conditions

The sharing mechanism is governed by Article 35. A "sharing entity" (a member) may share data centre or cloud computing services with a "using entity" (another member) where the sharing entity owns the hardware through which the service is made available and provides that service. Ownership may be direct or indirect through an intermediate legal entity, provided the sharing entity exercises control over that entity (Article 35(1)).

To ensure secure, resilient provision, the sharing entity must put in place appropriate technical, operational and organisational measures (Article 35(2)) — including, per Recital 72, policies on risk analysis, information-system security, access control, incident handling, business continuity, and interoperability. Before sharing begins, the sharing entity must demonstrate to the Commission that it meets these conditions, and the Commission must assess and allow the arrangement (Article 35(3)–(4)).

Cost recovery and financial model

Under Article 35(5), a sharing entity "may charge a fee to the using entity," but the fee "shall be limited to the costs that the sharing entity incurs in relation to the sharing of the service" and "shall not constitute a pecuniary interest" within the meaning of Directive 2014/24/EU and Regulation (EU, Euratom) 2024/2509.

As a result, and as proposed in Recital 73, where charges are strictly limited to cost recovery, the fees should not be deemed consideration for a service or constitute a public contract — so the sharing of services within the Federation "should not fall under Union public procurement rules."

The administrative costs of the Federation itself would be financed by its members through fees levied by the Commission (Article 36). Those fees would constitute internal assigned revenues used to cover the Commission's costs, including assessing membership requests and running the platform; any surplus would return to the general Union budget. Where the Union initially bears costs, members would reimburse them over a period not exceeding three years (Article 36(2)).

Strategic objectives

The Federation serves several goals. First, it addresses idle and underutilised capacity by letting public bodies share existing resources. Second, it supports sovereignty and resilience by creating a network of trusted, public-sector-controlled infrastructure and reducing reliance on third-country providers. Third, it can offer economies of scale, helping smaller public authorities access high-quality services they might not be able to procure or maintain alone.

What this means for you

For public-sector procurement officers and IT managers, the EuroCloud Federation — as proposed — would offer a new route for sourcing cloud and data centre services. Rather than running separate procurements, your organisation could explore joining to access a pooled catalogue from other Member States and Union entities.

Key implications include:

  • Streamlined sourcing: Where the cost-recovery conditions are strictly met, sharing within the Federation would not fall under standard Union public procurement rules (Recital 73), potentially reducing administrative burden.
  • Access to shared capacity: You could access idle or underutilised capacity from other public bodies on a cost-recovery basis, while keeping control over data and security.
  • Compliance requirements: To share services, your entity would need to demonstrate to the Commission that it meets the technical, operational and organisational conditions in Article 35.
  • Voluntary participation: Membership would be voluntary; you must proactively request to join (Article 34(1)). This calls for internal assessment of whether your infrastructure can integrate with the platform and whether you would share or consume capacity.

Common misconceptions

  • Misconception: The EuroCloud Federation is a single, EU-owned cloud provider.
    • Reality: As proposed, it is a federation that facilitates sharing of existing public-sector capacity, not new EU-owned infrastructure.
  • Misconception: Private companies can join to sell services.
    • Reality: Participation is limited to public entities, without direct private participation (Recital 71; Article 34(1)).
  • Misconception: Sharing through the Federation requires standard procurement tenders.
    • Reality: Where fees are strictly limited to cost recovery and do not constitute a pecuniary interest, sharing would not fall under Union public procurement rules (Article 35(5); Recital 73).
  • Misconception: The Federation is mandatory for all public-sector cloud use.
    • Reality: Participation is voluntary (Article 34(1)). Public authorities may still procure cloud services by traditional means.

Related

This is general information about a draft EU regulation, not legal advice.