EUs

A regulatory package as a long-term political strategy

The European Union’s recent digital laws are often described as a regulatory package. The AI Act, the Data Act, and the emerging Data Union Strategy form a wide experiment in using transparency as infrastructure for the digital economy.

The underlying idea is that digital markets cannot be governed well if users, businesses, regulators, and affected individuals cannot understand how systems work, who controls data, where risks arise, and who is responsible for intervention. Therefore, transparency is becoming a condition for accountability, market access, innovation, and long-term trust that falls under what appears as a long-term strategy to regain data sovereignty.

The EU’s policy bet

The EU regulatory approach is founded on the premise that greater transparency can enhance the governability of complex digital systems. However, the mere disclosure of information does not result directly in a greater understanding of the data available; a company can disclose large amounts of technical material while leaving users no better able to assess risk, compare alternatives, or challenge decisions.

Accordingly, the success of the EU’s transparency framework should not be measured by the sheer volume of regulatory obligations it imposes. Rather, its effectiveness depends on whether those obligations generate information that is genuinely useful in practice. The relevant benchmarks are whether disclosures are meaningful, accessible, timely, and comparable, thereby enabling users and regulators to make informed decisions.

The AI Act’s goal to make AI legible

The AI Act shows the EU’s approach most clearly. Its stated purpose is to improve the functioning of the internal market, promote human-centric and trustworthy AI, protect health, safety, and fundamental rights, and support innovation (Regulation (EU) 2024/1689).

In policy terms, the AI Act tries to make AI systems legible. It assumes that AI risks should not be addressed only after harm occurs. They should be identified, documented, and managed before systems are placed on the market or deployed in sensitive settings.

This is why transparency is linked to risk. High-risk systems face more demanding documentation, monitoring, and information obligations. Lower-risk systems face lighter duties. The European Commission describes the AI Act as the first comprehensive legal framework on AI, designed to address AI risks while fostering trustworthy AI in Europe (European Commission, “Regulatory framework for AI”).

The policy logic is fundamentally pragmatic. Effective regulatory oversight depends on access to adequate information. Likewise, deployers require sufficient information to make informed decisions regarding whether and under what conditions to implement AI systems. Individuals affected by AI-assisted decisions must also have access to relevant information in order to understand how such decisions have been made and, where appropriate, to question or challenge them.

The Data Act attempts to rebalance informational power.

The Data Act uses transparency for a different purpose. Where the AI Act focuses on risk and trust, the Data Act focuses on access, fairness, and economic value. Its objective is to create harmonized rules on fair access to and use of data (Regulation (EU) 2023/2854).

The challenge is that data generated by connected products and digital services is often controlled by a small number of firms. Users may generate valuable data through their use of products but still lack practical access to it. Businesses may need data to innovate, repair products, or offer competing services but face legal, technical, or contractual barriers.

The Commission presents the Data Act as a way to address the challenges and opportunities created by data in the EU, with emphasis on fair access, user rights, and personal data protection (European Commission, “Data Act”).

In this context, transparency functions as a mechanism for redistributing information. Where users are unaware of what data is generated, how it can be accessed, or the conditions under which it may be shared, formally recognized rights of access are unlikely to translate into meaningful practical control. Effective data rights therefore depend not only on their legal recognition but also on the transparency necessary to enable individuals to exercise them.

The Data Union Strategy: From Control to Usable Data

The Data Union Strategy shows the broader direction of EU policy. The Commission frames it around increasing the availability of data for AI development, simplifying EU data rules and strengthening Europe’s position on international data flows (European Commission, “European Data Union Strategy”).

This is significant because it seems that the European Union seeks to pursue two complementary goals simultaneously. On the one hand, it aims to protect fundamental rights and mitigate the risks associated with digital technologies. On the other, it seeks to facilitate greater access to data in order to foster innovation, support the development of artificial intelligence, and enhance European competitiveness. In this way, transparency serves as the connecting principle between these objectives. In fact, by increasing the visibility of how data is collected, processed, and shared, it is intended to strengthen trust in data flows while making them more accessible and capable of supporting innovation.

Why meaningfulness matters most

Meaningfulness is the anchor test. Transparency is useful only if it reveals something that can change decisions or enable scrutiny.

In the AI context, this means information about a system’s purpose, limitations, performance, and risk profile must be specific enough to support procurement, oversight, and challenge. In the data context, it means users must receive information that helps them understand what data exists and how it can be used.

Generic compliance language is not enough. A disclosure that says a system is “risk managed” or that data is “available upon request” may be formally correct but still unhelpful. The real question is whether the information helps someone act.

Information must arrive before decisions are locked in.

Transparency is most useful when it arrives early enough to affect decisions. AI information matters most before procurement and deployment. Data-access information matters most before users become dependent on a particular product, service, or cloud provider.

Post-event transparency can still support audit and enforcement. But it is weaker as a prevention tool. A regime that informs users only after they have lost practical freedom of choice will have limited effect.

Accordingly, comparability occupies a central role in the European Union’s internal market strategy. If transparency is intended to promote competition, facilitate public procurement, and strengthen trust in cross-border digital markets, disclosures must be presented in a manner that enables users, businesses, and regulators to meaningfully compare systems, services, and contractual arrangements.

This objective is particularly relevant in the context of AI procurement, connected product ecosystems, and cloud switching, where informed comparisons are essential to reducing information asymmetries and preventing vendor lock-in. Nevertheless, pursuing comparability inevitably involves trade-offs. While standardized disclosure frameworks can improve the accessibility and consistency of information, they may also obscure sector-specific risks and contextual nuances. Consequently, a uniform template may enhance market discipline and regulatory oversight while simultaneously limiting a more nuanced understanding of the particular risks associated with individual technologies or markets.

The risk of regulatory complexity

The EU’s approach is ambitious, but it is also complex. The AI Act does not operate alone. It sits alongside the GDPR, the Data Act, the Digital Services Act, the Digital Markets Act, the Cyber Resilience Act, and sector-specific rules.

A European Parliament study notes that the AI Act interacts with other digital laws, including the GDPR, Data Act, and Cyber Resilience Act, and that this interplay creates significant regulatory complexity (European Parliament, “Interplay between the AI Act and the EU digital legislative framework”).

Secondary analysis makes a similar point. CEPS has argued that the AI Act may overlap with several horizontal and sector-specific rules, creating possible gaps, inconsistencies, and legal uncertainty (CEPS, “The AI Act and emerging EU digital acquis”).

Competitiveness and the SME problem

The burden of complexity is not shared equally. Large technology firms are better able to absorb compliance costs, hire specialists, and shape standards. Smaller firms may struggle.

Bruegel has warned that EU AI regulation risks imposing disproportionate burdens on smaller firms and may contribute to market concentration if compliance demands are not properly balanced (Bruegel, “The right balance: how to fix European Union artificial intelligence regulation”). This is a key policy tension. The EU wants trustworthy digital markets, but it also wants innovation and technological sovereignty. Transparency can support both goals, but only if it is designed in a way that smaller firms can use and implement.

From disclosure to governance

The EU’s digital strategy should be judged by a practical standard. The question is not whether Europe has created the world’s most elaborate digital rulebook. The question is whether that rulebook produces usable knowledge, enables timely intervention, supports meaningful comparison and redistributes informational power.

If it does, transparency may become genuine governance infrastructure. If it does not, the EU risks building a sophisticated compliance architecture that documents the digital economy without effectively governing it.

European Union foreign ministers met in Brussels on Monday to discuss whether there is enough support for new measures to curb trade with Israeli settlements in the occupied West Bank.

“Everybody agrees that the situation in the West Bank is really intolerable,”  EU foreign policy chief Kaja Kallas said at the start of a meeting.

“What is happening in the West Bank is actually making it more and more impossible that the two-state solution ever can come into effect.”

Here is more about the ongoing EU discussions on Israeli settlements.

What options are the EU foreign ministers discussing?

The discussions are based on a confidential paper by the European Commission that floats three different options – an import licensing system, prohibitive tariffs, or a ban – an unnamed senior EU diplomat and a European official said, Reuters reported.

The EU has long struggled to take major decisions on Middle East policy because of deep and long-standing divisions among its 27 member countries, particularly on the Israeli-Palestinian conflict.

Diplomats said the debate at a meeting in Brussels on Monday was not expected to yield any concrete decisions, but would help to sound out if there is enough support to move forward.

Are Israel’s illegal settlements in the West Bank expanding?

Israel has occupied the West Bank since 1967. More than 500,000 Israeli settlers live in the territory, excluding east Jerusalem, among some three million Palestinians.

This month, Israel’s Security Cabinet has approved a plan to establish 13 new settlements in the central occupied West Bank.

The number of new settlements has soared recently, according to new data from the Palestinian Forum for Israeli Studies (MADAR). After averaging approximately eight outposts annually between 2012 and 2022, the number jumped to 32 in 2023, then 62 in 2024, reaching 86 during 2025.

Nasser Khdour, Middle East assistant research manager at the Armed Conflict Location and Event Data Project (ACLED), said that 2026 is the deadliest year for settler violence since ACLED began tracking incidents in Palestine a decade ago.

“Incidents have included attacks on Palestinians, property destruction, damage to farming equipment and facilities, tree uprooting, and grazing on Palestinian agricultural land. Other incidents have involved looting, including the theft of equipment, sheep, and crops,” Khdour was quoted as saying on the ACLED website in May.

What pressure has the EU faced to take measures about this?

Under pressure for the EU as a whole to take measures, the bloc’s executive last week laid out options to curb trade with settlements, including a ban.

“There have been a lot of asks and requests from the member states regarding the ban of the trade with illegal settlements,” Kallas said.

“Let’s see if these options that have been provided now will have a stronger push from member states.”

Belgium’s Foreign Minister Maxime Prevot said the options laid out appeared to be more “a bone to gnaw on than a genuine desire to move forward”.

“We are calling for concrete proposals,” he said.

There is disagreement in Brussels as to whether that move would need backing from all 27 member states or just a weighted majority.

Diplomats say that key players Germany and Italy are still undecided on the move.

What has the EU’s position been so far?

Several EU countries – including Spain, the Netherlands, and the Republic of Ireland – have already imposed their own trade restrictions on Israeli settlements in the occupied Palestinian territories, considered illegal under international law.

In May, the EU imposed sanctions on four entities and three individuals over what it described as serious and systematic human rights abuses against Palestinians in the West Bank.

In a July 2024 advisory opinion, the International Court of Justice said Israel’s occupation of Palestinian territories and settlements in the West Bank are illegal and that states should take steps to prevent trade or investment relations that help maintain the situation.

Israeli Foreign Minister Gideon Saar last year described a push by some European governments to implement the advisory opinion as “shameful”.

As the European Union tries to fight its record-high €1 billion deficit per day with China, the bloc’s leaders are increasingly pointing to the problem of currency manipulation, which they say Beijing is using to make products even cheaper on the EU market – which is already flooded with Chinese imports.

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“An artificially low currency is an advantage for those who want to improve their economic competition positions,” German Chancellor Friedrich Merz said after the European Council summit on 19 June.

The matter of the Chinese currency and its management was also high on the agenda of last week’s G7 summit in France.

The signs are that this is a new front in Europe’s trade battle against Beijing. To understand why the devaluation of the yuan (or renminbi) matters, here are three things to know.

What’s wrong with the Chinese currency?

According to a report by the Haut Commissariat à la Stratégie au Plan, a French government advisory body, the undervaluation of the yuan is estimated at around 20-25 percent.

“While there is no universally recognised method for determining unequivocally whether a currency is significantly overvalued or undervalued, the assessment that the renminbi (RMB) is significantly undervalued is now widely shared, including among international institutions,” the report said.

In theory, China’s trade surpluses should naturally create demand for the yuan, leading to an appreciation of the currency, but it is not the case.

However, the devaluation of the yuan might not be the direct result of central bank intervention. Alicia Ferro Herrera, an expert at the Brussels-based think tank Bruegel, told Euronews that China prevents its currency from appreciating faster by not bringing all of its export revenues back to the mainland.

“They stay in Hong Kong and they are not converted into RMB,” she said.

How does it impact trade between China and the EU?

The EU deficit with China hit a record-high €359.9 billion in 2025. That same year marked the first time that all EU member states had a trade deficit with Beijing, including Germany, the EU’s largest economy.

“This is simply not sustainable,” European Commission President Ursula von der Leyen said last Friday.

According to the Haut Commissariat au Plan report, the undervaluation of the yuan plays a large part in keeping Chinese products competitive; as things stand, they are assessed by EU industry to be around 30-40 percent cheaper than European equivalents.

However, Ferro Herrera pointed out that the inflation differential also plays a great part.

“My estimate is that the inflation differential and its accumulation in Europe since the invasion of Ukraine explains about three quarters of the loss in external competitiveness,” she said.

What can the EU do?

In his remarks last Friday, Merz suggested the EU begin dialogue with China on the currency issue.

“We have to talk about this topic with each other,” he said. “It is in the interest of both sides.”

The German chancellor cited the 1985 Plaza Agreement, which saw the US, Japan, West Germany, the UK and France agree to depreciate the US dollar against the Japanese yen and the Deutsche Mark. The goal was to head off a protectionist turn from the US as its trade deficit deepened.

Merz also referred to the European Monetary System, which before the adoption of the euro relied on exchange-rate bands to limit currency fluctuations.

“That was a system where countries could coordinate through exchange-rate corridors,” he said.

Conversely, Ferro Herrera points out that the US did not push for any such negotiation when economic imbalances were discussed during the G7 last week.

In her view, Europe should monitor China’s export prices for major sector-by-sector deviations, since this is an important sign of overcapacity, as negative price growth occurs when goods cannot be sold.