Summary The EuroCloud Federation, as proposed in the Cloud and AI Development Act (CADA), is a voluntary "club" for European public sector bodies and Union entities to share their own underused cloud computing and data centre capacity. It is not a new commercial provider, but a cooperative mechanism managed by a Commission-run platform that connects members. Under Article 35, users pay only the direct costs incurred to share the service (cost-recovery), avoiding market prices and complex public procurement procedures. This initiative aims to optimize public assets, reduce reliance on third-country hyperscalers, and strengthen the Union's strategic autonomy.

Detail

The EuroCloud Federation is established under Article 34 of the proposed CADA (COM(2026) 502 final). Its core purpose is to facilitate the sharing of public sector data centre services and cloud computing services between Union entities (such as EU institutions, agencies, and bodies) and public sector bodies across Member States. Participation is strictly voluntary; Article 34(1) explicitly states that the Federation is open for participation on a voluntary basis, and members may request the Commission to join.

The Platform: A Central Hub for Sharing

To make this sharing practical and secure, the European Commission is mandated to establish and maintain a dedicated platform for the Federation. As outlined in Article 34(3), this platform serves two critical functions:

  1. A Catalogue: This provides a centralized list of available public sector data centre services and cloud computing services, allowing members to see what capacity is available across the Union.
  2. A Service Platform: This handles the technical orchestration of computing, storage, and network resources, enabling the secure exchange of services between members.

This infrastructure solves a significant logistical hurdle: without a central system, identifying, verifying, and securely connecting to another ministry's or agency's idle server capacity would be complex and risky. The Commission's platform standardizes these interactions, ensuring interoperability and security.

Who Can Share? Strict Eligibility and Control

The Federation is designed exclusively for public-sector cooperation. Article 35 sets rigorous conditions to ensure that the sharing mechanism remains within the public interest and does not distort competition with private cloud providers.

To act as a "sharing entity" (the member offering capacity), a public body must directly or indirectly own the hardware through which the service is made available. If the hardware is owned by an intermediate legal entity, the public sharing entity must exercise control over that intermediate entity. Article 35(1) defines this control through three cumulative conditions:

  1. The sharing entity exercises decisive influence over the strategic objectives and significant decisions of the intermediate entity.
  2. There is no direct private capital participation in that intermediate entity.
  3. More than 80% of the intermediate entity's activities are carried out in the performance of tasks entrusted to it by the sharing entity.

These criteria ensure that the Federation remains a genuine public-sector cooperation mechanism, preventing private companies from using it to bypass public procurement rules or gain an unfair advantage over competitors in the open market.

Costs: Paying Only for the Service, Not the Profit

A key feature of the EuroCloud Federation is its financial structure, which prioritizes cost-recovery over profit. Article 35(5) clarifies that a sharing entity may charge a fee to the "using entity" (the member consuming the capacity), but this fee is strictly limited.

The fee must be limited to the costs that the sharing entity incurs in relation to the sharing of the service. These costs include:

  • Allocating and isolating resources.
  • Managing access.
  • Enabling the integration and interoperability of resources.
  • Ensuring compliance with applicable Union law.
  • Managing the sharing relationship.

Crucially, Article 35(5) states that these fees do not constitute a "pecuniary interest" or a public contract within the meaning of Directive 2014/24/EU. This legal distinction means the sharing is treated as public-sector cooperation governed solely by considerations of public interest, rather than a commercial transaction. Consequently, the fees do not trigger standard public procurement procedures, allowing for faster access to resources.

Governance and Administrative Fees

While the sharing of services is limited to cost-recovery, operating the Federation itself requires administrative resources. Article 36 establishes that the costs arising from the Commission's activities—such as assessing membership requests, maintaining the platform, and overseeing the federation—are jointly financed by the members through fees. These administrative fees are calculated to cover the Commission's costs and are not intended to generate surplus revenue.

What this means for you

For public-sector procurement officers, IT managers, and policy makers, the EuroCloud Federation offers a strategic tool to manage cloud dependencies and optimize public budgets.

1. Monetizing Idle Assets Many public bodies possess underutilized data centre capacity that represents a sunk cost. Instead of letting this hardware sit idle, you can list it in the Commission's catalogue. This turns unused assets into a shared resource, helping other public bodies meet their sovereignty requirements while allowing you to recover your operational costs.

2. Accessing Sovereign Capacity Without New Procurement If your department requires additional secure cloud capacity but lacks the budget to build new infrastructure or engage in lengthy commercial tenders, you can browse the Federation's catalogue. You may find another Member State or EU agency with available capacity that already meets high sovereignty and security standards. Because the arrangement is not a public contract, you can access this capacity more rapidly.

3. Strengthening Strategic Autonomy By sharing capacity within the public sector, you reduce reliance on third-country commercial hyperscalers. This aligns with CADA's broader objective of strengthening the Union's strategic autonomy in cloud and AI technologies, ensuring that critical public data remains within the EU ecosystem.

4. Simplified Financial Management The cost-recovery model ensures transparency and fairness. You pay only for the specific costs incurred to share the service, avoiding market markups. This makes the Federation an attractive option for budget-constrained public bodies seeking high-quality, sovereign cloud services.

Common misconceptions

Misconception 1: The EuroCloud Federation is a new EU cloud provider. Reality: It is not a provider. It is a federation of existing public bodies sharing their own infrastructure. The Commission does not provide the cloud services; it only provides the platform that connects the providers (other public bodies) with the users.

Misconception 2: Private companies can join and sell services on the Federation. Reality: Private participation is excluded. Article 35 strictly limits sharing to public entities that own or control the hardware. Private providers cannot list their services on the EuroCloud platform to bypass public procurement rules or compete unfairly.

Misconception 3: Members can charge market rates for shared services. Reality: No. Article 35(5) explicitly limits fees to the actual costs incurred for sharing the service. Any charge above direct cost recovery is prohibited. This ensures the Federation remains a cost-saving cooperation mechanism, not a commercial marketplace.

Misconception 4: Joining is mandatory for all public bodies. Reality: Participation is entirely voluntary. Article 34(1) states that the Federation is open for participation on a voluntary basis. Public bodies can request to join if they wish, but there is no obligation to do so.

Related

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