Summary The European public sector cloud federation (the 'EuroCloud Federation') is a voluntary network established under Article 34 of the proposed Cloud and AI Development Act (CADA), COM(2026) 502 final. Its primary purpose is to facilitate the sharing of public sector data centre services and cloud computing services between Union entities and public sector bodies across the EU. As proposed, the Federation is open to these entities on a voluntary basis, allowing them to pool idle capacity, optimize resource use, and strengthen the Union's strategic autonomy without triggering standard public procurement rules, provided fees are strictly limited to cost recovery.

Detail

The EuroCloud Federation represents a structural shift in how the EU public sector manages digital infrastructure. Rather than each Member State or Union institution procuring separate, isolated cloud solutions, the proposed CADA creates a mechanism for interconnection and resource sharing. This initiative is designed to address the fragmentation of the EU's digital market and reduce reliance on non-European hyperscalers by leveraging existing public assets.

Establishment and Legal Basis

The legal foundation for the Federation is explicitly set out in Article 34(1) of the CADA proposal. The text states: "The European public sector cloud federation (the 'EuroCloud Federation') is hereby established."

The provision defines the scope of participation clearly: the Federation "shall be open for the participation of Union entities and public sector bodies on a voluntary basis." This voluntary nature is a critical design feature. It respects the principle of subsidiarity, allowing Member States and EU institutions to join based on their specific strategic needs and existing infrastructure capabilities, rather than imposing a mandatory centralization of all public cloud assets.

To operationalize this, Article 34(1) further notes that "Union entities and public sector bodies may request the Commission to join the EuroCloud Federation." The Commission is empowered to adopt implementing acts to specify the procedure for participation and the template for such requests, ensuring a standardized and transparent entry process for all potential members.

Purpose and Core Functionality

The central objective of the Federation is defined in Article 34(2), which mandates that it "shall facilitate the sharing of public sector data centre services and cloud computing services between Union entities and public sector bodies under the conditions set out in Articles 35 and 36."

This is not a commercial marketplace for buying and selling cloud services in the traditional sense. Instead, it is a cooperative framework for public-sector bodies to exchange capacity. To enable this, Article 34(3) requires the Commission to establish a dedicated platform for the EuroCloud Federation. This platform must provide at least:

  1. A catalogue providing information on available public sector data centre services and cloud computing services.
  2. A service platform for the exchange and orchestration of computing, storage and network resources and services.

By creating a centralized view of available capacity, the Federation aims to reduce the "idle capacity" problem where one public body has underutilized resources while another is procuring new infrastructure. This directly supports the CADA's broader goals of increasing computing capacity and reducing dependencies on third-country providers.

Governance, Fees, and Financial Sustainability

The financial model of the EuroCloud Federation is designed to be self-sustaining and transparent. Article 36 outlines that the costs arising from the Commission's activities under this chapter "shall be jointly financed by the members of the EuroCloud Federation through fees levied by the Commission."

If the initial establishment costs are borne by the general budget of the Union, they must be reimbursed by the EuroCloud members over a period not exceeding three years. The revenues generated from these fees constitute internal assigned revenues, meaning they are ring-fenced specifically to cover the costs of the Federation's activities, including the assessment of membership requests and the maintenance of the platform. Any revenue remaining after covering these costs is entered into the general budget of the Union.

Conditions for Sharing Services

Participation and service sharing are subject to strict conditions to ensure security and prevent market distortion. Article 35 details the rules for sharing:

  • Ownership and Control: A member (the 'sharing entity') may share services with another member (the 'using entity') only if the sharing entity "directly, or indirectly through an intermediate legal entity, owns the hardware through which the service is made available and provides the service." If the sharing entity acts through an intermediate legal entity, it must exercise control over that entity.
  • Security Measures: The sharing entity must "put in place appropriate technical, operational and organisational measures to ensure an effective, secure and resilient provision of services."
  • Cost Recovery Principle: Crucially, Article 35(5) states that the sharing entity may charge a fee, but "The amount of the fee shall be limited to the costs that the sharing entity incurs in relation to the sharing of the service."
  • Exemption from Procurement Rules: Because the fees are strictly limited to cost recovery and do not constitute a "pecuniary interest," Article 35(5) clarifies that "the sharing of public sector data centre services and cloud computing services within the EuroCloud Federation should not fall under Union public procurement rules." This exemption is vital for enabling rapid, agile cooperation between public bodies without the lengthy tender processes required for commercial contracts.

Strategic Context

The EuroCloud Federation is a key component of the CADA's "autonomy and adoption" pillar (Title IV). It complements the Union cloud computing sovereignty framework (Article 16) by providing a practical mechanism for public bodies to access and share infrastructure that meets high sovereignty standards. By fostering a federated approach, the EU aims to mitigate the risks associated with dependence on a limited number of third-country cloud providers, ensuring that critical public data and services remain under European control and jurisdiction.

What this means for you

For public-sector IT leaders, procurement officers, and policy makers, the EuroCloud Federation offers a new strategic lever for digital transformation.

  • Access to Trusted Capacity: If your organization faces a surge in demand or needs to deploy specific workloads, you can access the Federation's catalogue to find available capacity from other public sector bodies. This can be a faster, more secure, and potentially more cost-effective alternative to procuring from commercial third-country providers, particularly for workloads requiring high levels of sovereignty assurance.
  • Monetizing Idle Resources: If your organization has underutilized data centre capacity or cloud infrastructure, you can offer these resources to other members. The framework allows you to recover the costs associated with sharing these services (e.g., for allocation, isolation, and management) without triggering complex public procurement procedures, provided the fees remain strictly within the cost-recovery limit.
  • Voluntary Participation: Joining the EuroCloud Federation is not mandatory. You can assess whether the benefits of shared sovereignty, resource optimization, and reduced vendor lock-in outweigh the administrative requirements of participation. The Commission will provide templates and procedures to streamline the joining process.
  • Security Compliance: To share services, you must demonstrate that you have implemented robust technical and organizational security measures. This aligns with broader cybersecurity requirements under the NIS2 Directive and the Cybersecurity Act, ensuring that participation in the Federation reinforces your overall security posture.
  • Reduced Vendor Lock-in: By diversifying your cloud sources to include public sector peers, you reduce dependence on single commercial vendors. This enhances your operational resilience and strengthens the EU's collective bargaining power in the global cloud market.

Common misconceptions

"The EuroCloud Federation is a commercial cloud provider." No. It is not a company selling services for profit. It is a cooperative framework for public sector entities to share existing infrastructure. Fees are strictly limited to cost recovery and do not generate profit.

"All public sector bodies must join the EuroCloud Federation." No. Participation is voluntary. As stated in Article 34(1), the Federation is open to Union entities and public sector bodies on a voluntary basis. There is no mandatory obligation to participate.

"Sharing services through the Federation requires a full public procurement tender." No. Article 35(5) explicitly states that the sharing of services within the EuroCloud Federation does not fall under Union public procurement rules, provided the fees are limited to cost recovery and do not constitute a pecuniary interest. This exemption is designed to facilitate agile cooperation.

"Any public sector body can share any service." No. Strict conditions apply. Only entities that own the hardware (directly or indirectly) through which the service is provided can share services. Additionally, strict security and technical measures must be in place to ensure the service is secure and resilient, and the sharing must be anchored in public-sector cooperation governed solely by considerations of public interest.

Official sources

Related

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