European Parliamentary Research Service Blog

Written by Sebastian Clapp and Martin Höflmayr with Falk Vambrie.

The European defence industry is highly fragmented, with limited collaborative investment and procurement, divergent national regulations, and protectionist tendencies that undermine efficiency, interoperability and competitiveness. The Letta report makes the case for a concerted effort to advance towards the development of a ‘Common Market for the Security and Defence Industry’, which focuses on regulatory simplification, pooled procurement, and cross-border industrial integration. While the Draghi report puts its finger on the EU defence sector’s fragmentation, under-investment, and external dependencies, it urges coordinated action to strengthen the industrial base, boost joint innovation, and align national efforts through common policies and incentives. According to the White Paper for European Defence, a truly integrated EU defence market would be among the largest globally, strengthening competitiveness, readiness and industrial scale. It would enable firms from the European defence technological and industrial base (EDTIB) to expand across the Union and stimulate cross-border cooperation, mergers and new ventures, increasing the availability of EU-made defence products.

The new Defence Readiness Omnibus aims to remove procedural bottlenecks and facilitate up to €800 billion in defence investment under the Rearm Europe/Readiness 2030 plan, combining streamlined procurement rules, simplified intra-EU transfers, and revised financial instruments. Achieving readiness and autonomy requires predictable joint planning, harmonised standards, and public-private coordination. Without genuine market reform, Europe’s rising defence spending risks being absorbed by inefficiencies rather than delivering real capability gains. A functioning common defence market is therefore essential not only for competitiveness, but also for deterrence, resilience and strategic sovereignty in an increasingly volatile geopolitical environment.

The European Parliament advocates a fully integrated internal market for defence to overcome fragmentation, urging regulatory reform, joint procurement, and cross-border industrial cooperation as essential steps towards greater efficiency, competitiveness, and strategic autonomy.

Read the complete briefing on ‘Building a common market for European defence‘ in the Think Tank pages of the European Parliament.

EU members of NATO: Composition of defence spending

Written by Maria Niestadt.

As the global race to harness the power of artificial intelligence (AI) accelerates, the European Union has set the objective of becoming a leading AI continent. The adoption of the Artificial Intelligence Act in 2024 was a milestone in establishing a comprehensive regulatory framework for AI in the EU, but regulation alone cannot make the EU a technological leader. In April 2025, the European Commission published an AI continent action plan, a communication that attempts to look beyond rules and combine regulatory oversight with investment, infrastructure and skills development. It also aims to increase the use of AI in both the private and public sector. The plan illustrates the Commission’s growing attention to competitiveness, moving away from its previous focus on setting usage rules

Despite progress in some areas, the EU is still far from being a global leader in AI, in terms of scale, investment, and uptake of AI. Structural weaknesses such as a fragmented single market, limited private investment, and reliance on foreign cloud and semiconductor technology continue to hinder progress. Stakeholders are divided on the road to follow. While industry representatives call for simplifying regulation to boost innovation, civil society warns against sacrificing democratic safeguards.

The EU’s prospects of becoming an AI continent depend not only on its ability to implement the AI continent action plan but also on its decisiveness in acting on other fronts such as making progress on the Savings and Investments Union, and its progress in reducing reliance on foreign technologies. The European Parliament will play a central role in scrutinising the Commission’s activities and shaping legislation such as the forthcoming Cloud and AI Development Act.

Read the complete briefing on ‘Making Europe an AI continent‘ in the Think Tank pages of the European Parliament.

Written by Clément Evroux.

CONTEXT

On 25 June 2025, the Commission published a proposal for a regulation on the safety, resilience and sustainability of space activities in the European Union (EU) (‘the EU space act’). A majority of Member States have already adopted or are considering adopting legislation on space activities. The regulation’s relevance was highlighted by Mario Draghi’s report on the future of European competitiveness, which explained the role of space systems and services in supporting the EU’s sovereignty and economy.

Article 114 of the Treaty on the Functioning of the European Union – TFEU (internal market) is the legal basis of the proposed regulation. It aims to create a single market for space activities, grounded on common safety, sustainability and resilience rules, which should apply in principle to any space operator providing space services in the EU. The proposal is expected to lay down rules on: the authorisation, registration and supervision of space activities and services carried out by space service providers; orbit traffic management; and the establishment of an EU space label. On resilience, the proposed regulation is expected to complement Directive (EU)2022/2555 on measures for a high common level of cybersecurity across the EU, and Directive (EU) 2022/2557 on the resilience of critical entities. In the Parliament, the file has been referred to the Committee on Industry, Research and Energy (ITRE), which has appointed Elena Donazzan (ECR, Italy) as rapporteur. In the Council, the working party on space has started examining the proposal.

LEGISLATIVE PROPOSAL

2025/0335(COD) – Proposal for a regulation on the safety, resilience and sustainability of space activities in the Union – COM(2025) 335, 25 June 2025

NEXT STEPS IN THE EUROPEAN PARLIAMENT

For the latest developments in this legislative procedure, see the Legislative Train Schedule: 2025/0335(COD) EU space law

Read the complete briefing on ‘EU space act‘ in the Think Tank pages of the European Parliament.

Written by Steven Blaakman.

Although euthanasia and assisted dying remain highly controversial in large parts of the globe, an increasing number of countries have legislation on it in place or are considering doing so. This is due to changing attitudes, advancements in medical technology and an ageing population.

Several EU countries are at the forefront of these legal changes; at the same time, each of them has come up with its own solutions for addressing challenges such as how to avoid abuse.

Neither EU law nor the European Convention on Human Rights contain provisions precluding EU countries from legislating on euthanasia. In response to questions from Members of the European Parliament, the European Commission has made it clear the EU is not competent to deal with the issue in any way.

Four EU countries – Belgium, Spain, Luxembourg and the Netherlands – have legislation in force that allows euthanasia to be administered by a physician. Germany, Italy and Austria allow assisted suicide only.

The Netherlands and Belgium, the two EU countries that were the first to allow euthanasia, have seen an increasing number of people apply for euthanasia over the years, with studies showing no sign of the legislation leading to any abuse.

In addition, several EU countries are working on legislation on euthanasia or assisted dying. These include: Ireland, France, Cyprus, Malta, Portugal and Slovenia. The Portuguese parliament adopted relevant legislation back in 2023; however, owing to vetoes by the Portuguese president and rulings by the country’s constitutional court, it has still not entered into force.

Read the complete briefing on ‘Euthanasia legislation in the EU‘ in the Think Tank pages of the European Parliament.

Written by Pieter Baert.

G7 statement

On 28 June 2025, the G7 issued a statement expressing a ‘shared understanding’ that the domestic and foreign profits of US-parented multinational groups would be excluded from the scope of Pillar Two, the OECD-G20 global minimum corporate tax framework. Instead, the G7 signalled readiness to work on a ‘side-by-side’ approach in which the US GILTI regime, its current minimum tax on foreign earnings of US parented groups – would co-exist with Pillar Two. The statement allowed for the withdrawal of proposed US retaliatory measures (‘section 899’) that had been included in the One Big Beautiful Bill Act (OBBBA).

Reminder: Pillar Two applies a 15 % global minimum effective tax rate using a hierarchical rule order to ensure large multinational enterprises are taxed appropriately in each jurisdiction:

• 1. The Qualified Domestic Minimum Top-Up Tax (QDMTT) – Gives the local jurisdiction first claim to top up low-taxed domestic profits.
• 2. The Income Inclusion Rule (IIR) – The ultimate parent’s jurisdiction imposes a top-up tax on the local parent entity to make up for any remaining low-taxed profits of foreign entities.
• 3. The Undertaxed Profits Rule (UTPR) – If the IIR is not applied by the ultimate parent’s jurisdiction, the UTPR steps in as a backstop, with lower-tier jurisdictions imposing top-up taxes on local entities to make up for any remaining low-taxed profits in the parent jurisdiction or any other third jurisdiction.

Council Directive (EU) 2022/2523 introduced Pillar Two’s minimum tax rules in the EU.

Given the broad nature of the G7 statement, which speaks of ‘accepted principles’, it is difficult to draw definitive conclusions at this stage. Based on its wording, a side-by-side approach – if endorsed by the OECD Inclusive Framework – could imply that non-US jurisdictions would not apply the UTPR to local entities of US-parented groups in respect of low-taxed profits arising in the US or in another jurisdiction that does not apply the QDMTT or the IIR. However, the statement does not explicitly clarify the specific terms of the exemption. For instance, it does not address how US intermediary parent entities within non-US multinational groups would be treated for minimum tax purposes, the potential creditability of the GILTI tax in relation to a jurisdiction’s QDMTT, or how the side-by-side approach would be defined in legislation.

NCTI and Pillar Two

As Pillar Two and the US’ GILTI (now called ‘NCTI’ under the OBBBA) operate on different principles and design features, it is difficult to assess to what extent the side-by-side approach could raise concerns about a level playing field or lead to base erosion and profit shifting among the multinational companies subject to each regime. Potential competitive disadvantages arise not only from differences in direct tax liabilities but also from the variations in the administrative and legal complexity of the respective regimes.

The OBBBA, signed into law in July 2025, introduced several adjustments allowing NCTI to more accurately reflect the real outcomes of Pillar Two. It increased the effective tax rate to 14 % (up from 13.125 %) and removed the carve-out for the Qualified Business Asset Investment (QBAI), thereby broadening the taxable base.

However, a key difference between the two systems remains: the ‘blending’ of income. Pillar Two requires corporate groups to meet a minimum level of tax in each jurisdiction where they operate (‘jurisdictional blending’), while the US’ NCTI allows income and foreign taxes to be blended across all foreign countries (‘global blending’). This way, low-taxed income can be offset with high-taxed income elsewhere and profits in some jurisdictions can be reduced by losses in others.

Table 1 – Key comparisons between OECD G20 Pillar Two and US NCTI

 OECD-G20 – Pillar TwoUS – NCTITax rate15 %14 %Tax baseBased on accounting incomeBased on US taxable incomeBlendingJurisdictional blendingGlobal blendingCarve-outsBased on payroll and tangible assets (SBIE)Payroll or tangible assets do not qualify for a carve-out

Note: The effective 14 % floor of NCTI results from the interaction of the 21 % US statutory corporate tax rate, the 60% inclusion of NCTI taxable income and the 90 % foreign tax credit limitation ((21 % * 60 %)/90 % = 14 %).

Additionally, the OBBA introduced broader corporate tax changes, such as permanent expensing for domestic R&D investments and a higher interest deductibility cap, to enhance US competitiveness.

Pillar One

The G7’s statement noted that the delivery of the side-by-side system ‘will facilitate further progress to stabilize the international tax system, including a constructive dialogue on the taxation of the digital economy’, referencing the negotiations on Pillar One. During the September 2025 plenary session, in response to questions from Members of the European Parliament on Pillar One and the prospects for a European digital services tax (DST), the European Commission acknowledged that Pillar One discussions were ‘on hold’ but could resume once a Pillar Two solution is reached. To give the OECD-led process space and time to deliver, the Commission stated that it does not intend to table a new proposal for a DST at this stage.

Several countries have already implemented or announced digital services taxes (DSTs), with revenues steadily increasing over time, showcasing the continuous growth of the digital economy. In 2023, Spain, Italy and France collectively generated €1.4 billion from their DSTs. However, estimating the revenue potential of an EU-wide DST would heavily depend on key design parameters, such as the definition of in-scope activities (the types of digital services or business activities that would fall under the tax), the applicable tax rate, and the revenue thresholds.

Table 2 – Revenue of DSTs, € million, 2019-2023

Revenue (€ million)20192020202120222023Spain  €166€295€323France€277€375€474€621€668Italy €233€303€394€434

Data source: Data on Taxation Trends – European Commission. All three countries apply a 3 % DST on turnover from online advertising, user data sales and digital platforms, with a €750 million global revenue threshold and varying domestic thresholds: €3 million (Spain), €25 million (France), and €5.5 million (Italy; lowered to €0 in 2025).

Read this ‘at a glance’ note on ‘Side by side? The future of Pillar Two minimum corporate tax rules‘ in the Think Tank pages of the European Parliament.

Written by Gisela Grieger.

The importance of the EU’s trade defence arsenal is underscored, among other factors, by persistent global overcapacity in a range of sectors, which has significant distorting effects on international markets, and by the weaponisation of trade, including through economic coercion amid growing geopolitical tensions.

The arsenal can be divided into two categories. First, the EU’s traditional trade defensive instruments (TDIs), which are based on multilateral trade agreements going back to Codes developed under the 1947 General Agreement on Tariffs and Trade; and second, the EU’s more recent autonomous trade instruments, most of which were enacted between 2019 and 2024.

TDIs enable the EU to deter and combat unfair trade practices from companies and public authorities of third countries, shield EU industries and jobs from these practices, and restore a level playing field for EU companies in the internal market. TDIs are mainly applied in the form of additional duties on imports of dumped and/or subsidised goods, or on goods whose imports have surged suddenly and unexpectedly and have caused serious injury to EU industry – or threaten to do so.

The EU’s autonomous trade instruments seek to fill regulatory gaps in international trade law in areas such as public procurement and foreign subsidies, with a view to levelling the playing field between EU companies and non-EU companies and to safeguarding the EU’s economic interests, including its economic security.

Against the backdrop of the United States’ recent unilateral tariff policies, which are likely to lead to a diversion of trade flows to other markets, including the EU, and to a further increase in the global use of trade defence measures, the relevance of the EU’s trade defence toolbox is set to grow in the future.

Read the complete briefing on ‘Understanding the EU trade defence toolbox‘ in the Think Tank pages of the European Parliament.

Written by Marie Lecerf.

A persisting gender pay gap

The ‘gender pay gap’ is a measurable indicator of inequality between women and men. It generally refers to the average difference between the remuneration of employed female and male workers.

Although the gender pay gap is measured by different methods and indicators, data clearly show that women around the world still earn less than men. Across OECD countries, on average, the unadjusted gender pay gap stands at 11.9 % – meaning that the median full-time working woman earns about 88 cents to every dollar or euro earned by the median full-time working man. This rate has barely moved in recent decades. Despite the increase in women’s educational attainment and participation in the labour market over the years, the gender pay gap remains a persistent and multi-dimensional issue in all countries and across all economic sectors. For women with children, women of colour, migrant women, and women with disabilities, the discrepancy is even larger. In 2023, women’s gross hourly earnings were, on average, 12.0 % below those of men in the European Union (Eurostat, EU-27). Across Member States, the gender pay gap varied widely, ranging from -0.7 % in Luxembourg to 19.0 % in Latvia.

International Equal Pay Day The United Nations’ commitment

Mainstreaming the gender perspective is key to the implementation of the United Nations (UN) 2030 Agenda for Sustainable Development. Since 2015, the ‘equal pay for work of equal value’ principle has been recognised as one of the priority areas of the United Nations sustainable development goals (UNSDGs), as mentioned in target 8.5: ‘By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value’. In 2017, under the leadership of the International Labour Organization (ILO), the UN entity for gender equality and the empowerment of women (UN Women) and the Gender Initiative of the OECD, and together with governments, labour organisations (e.g. ITUC), employers’ organisations (e.g. IOE) and other dedicated agencies, the Equal Pay International Coalition (EPIC) was launched for the effective and swift achievement of the principle. On 15 November 2019, the UN General Assembly adopted a resolution proclaiming 18 September as International Equal Pay Day. The resolution was introduced by the Equal Pay International Coalition with the support of Australia, Canada, Germany, New Zealand, Panama, South Africa and Switzerland. The day is intended to promote further action towards the achievement of equal pay for work of equal value.

The first International Equal Pay Day – 18 September 2020

On 18 September 2020, the first International Equal Pay Day, international leaders committed to taking affirmative action to narrow the gender pay gap. EPIC called on participants to put pay equity  at the heart of  COVID-19 recovery efforts by introducing integrated policy responses aimed at mitigating job and income losses resulting from the pandemic and ensuring that women do not end up disproportionately shouldering these job losses and reductions in incomes.

The 2025 Equal Pay Day

For EPIC, the focus this year will be (1) ‘Achieving Equal Pay for Work of Equal Value in the Beijing+30 Era’ for the members-only annual Technical Meeting and (2) an Equal Pay Day event featuring a friendly debate between senior representatives of workers’ and employers’ organisations, underscoring the complementarity of a multi-stakeholder approach and measures being taken.

European Union initiatives

Equal pay for equal work is one of the EU’s founding principles, enshrined in Article 157 of the Treaty on the Functioning of the European Union. Since then, there have been initiatives to address the gender pay gap at both EU and Member State levels. While some progress has been achieved, the gender pay gap remains a persistent feature of European labour markets. In response, as embedded in the EU gender equality strategy 2020-2025, the EU has complemented its soft measures by introducing binding legislation.

The Pay Transparency Directive (Directive (EU) 2023/970), adopted in May 2023 and in force since 6 June 2023, marks a recent step in the EU’s efforts to address pay transparency. It mandates salary transparency in job postings, bans the use of pay history, and grants employees the right to access information on pay levels by gender. Employers with at least 150 employees are required to report regularly on pay gaps. Where unexplained gaps of 5 % or more are identified, joint pay assessments must be conducted in cooperation with workers’ representatives. The directive also strengthens enforcement through a shift in the burden of proof, the right to compensation for victims of pay discrimination, and financial penalties for non-compliance. Member States must transpose the directive by 7 June 2026.

Other relevant legislation includes the Women on Boards Directive (2022), which requires listed companies to meet gender balance targets on corporate boards by mid‑2026, and the Work-Life Balance Directive (in force since 2022), which promotes equal sharing of care responsibilities by introducing new rights to paternity leave, parental leave, and flexible working.

In March 2025, the European Commission unveiled the roadmap for women’s rights to advance gender equality across all sectors of society, including a renewed push to reduce the gender pay gap.

European Parliament position

The European Parliament has long called for binding legislation to advance pay equity. In a series of resolutions since 2015, Parliament has urged the Commission to address persistent gender-based inequalities through stronger enforcement and transparency tools.

Parliament’s resolution of 30 January 2020 on the Gender pay gap urged the Commission to ensure that the forthcoming pay transparency legislation applies to both the public and private sectors, promotes the role of the social partners and collective bargaining, and includes strong enforcement policies for those failing to comply. Parliament’s resolution of 21 January 2021 on the new EU gender equality strategy stressed that binding measures are necessary to close the gender pay gap. In its 15 December 2021 resolution on Equality between women and men, Parliament called on Member States to develop an action plan with clear objectives to tackle the gender pay and pension gaps.

Members’ efforts have been key to shaping the final content of the Pay Transparency Directive and ensuring a strong implementation framework across the Union.

Read the complete briefing on ‘International Equal Pay Day‘ in the Think Tank pages of the European Parliament.

Written by Steven Blaakman.

Migrants contribute about 10 % to the world’s gross domestic product and are likely to gain in importance due to skills shortages and an ageing population in host countries. Labour migration also has a significant impact on the countries of origin, both positive and negative. The overall impact of migrant workers on their countries of origin varies depending on the circumstances. In 2022, there were 167.7 million migrant workers globally, 93 % of whom were employed. Some 90 % of migrants move voluntarily, mostly for economic reasons.

Remittances sent by migrants have become an important source of income for their countries of origin, reaching about US$656 billion in 2023. Additionally, diasporas can serve as a means for countries of origin to exercise more influence beyond their borders. These countries can also reap the benefits of the skills and knowledge acquired by returning migrants. Some countries, such as India and the Philippines, have policies in place to maximise the possible benefits.

On the other hand, the exodus of migrant workers can exacerbate skills shortages in their home countries, particularly in smaller ones. In addition, migrant workers may encounter substandard working conditions and lower wages compared to local workers.

Read the complete briefing on ‘How labour migration affects countries of origin‘ in the Think Tank pages of the European Parliament.

Top 20 countries of origin for international migrants in 2024 (in millions) International remittance flows to low- and middle-income countries (2000-2024) Top 10 countries receiving international remittances in 2022 (US$ billion)

Written by Györgyi Mácsai and Nadejda Kresnichka-Nikolchova, Members’ Research Service (EPRS) with Raffaele Ventura, GlobalStat, EUI.

This infographic provides insight into the economic performance of the United States (US) compared with the European Union (EU) and examines the trade dynamics between them. In 2024, the Gross Domestic Product (GDP) growth rate for the US was recorded at 2.8%, while the EU experienced a growth rate of 1.1%. Both inflation rates remain stable and show a declining trend compared to the years following the outbreak of the COVID-19 pandemic and the start of the war in Ukraine. The inflation rate in the US was slightly higher than that in the EU. Trade between the US and the EU continues to grow, except for EU imports of goods from the US, which have been in a declining phase since 2022.

Read this ‘infographic’ on ‘US: Economic indicators and trade with EU‘ in the Think Tank pages of the European Parliament.

Within the Schengen area, European Union (EU) citizens and non-EU nationals legally residing in the EU can move freely without being subject to border controls.

The Schengen area has 29 member countries: 25 EU countries (all except Ireland and Cyprus) and 4 non-EU countries (Iceland, Liechtenstein, Norway and Switzerland). Ireland chose not to join the Schengen area, although its police and judiciary cooperate fully with other Schengen countries in criminal matters.

As of 31 March 2024, Bulgaria and Romania are part of the Schengen area. On that date, border checks were lifted at internal air and sea borders. In January 2025, checks were also removed at internal land borders.

Common rules for the Schengen area

To ensure safe and controlled entry into the Schengen area, the Schengen Borders Code sets out common rules for checks at external borders. These include rules on identity verification and the duration of stay, as well as the common visa requirements. The Code also sets out the conditions for a temporary reintroduction of controls at internal borders within the Schengen area.

Following a 2024 update:

• EU countries can set up internal border checks for a maximum of two years in the case of a serious threat to internal security or public policy (a terrorist threat, for example).
• EU countries can reduce the number of border crossing points or shorten their opening hours in cases where a non-EU country encourages the movement of migrants towards the EU’s external borders.
• The Council can decide to introduce temporary travel restrictions at the EU’s external borders in the case of a large-scale public health emergency (a pandemic, for example).

Common visa policy

The EU has established a common visa policy for persons travelling through or staying for a short period in the Schengen area.

The Visa Code sets out the rules for obtaining short-stay visas, which are the most common type for people from outside the EU. These visas let you stay in the EU for 90 days within a 180-day period. If a person wants to stay longer than 90 days, they have to follow the national rules of the EU country they wish to stay in.

The EU has a list of countries whose citizens need a visa to enter the EU, and a list of countries whose citizens do not.

Digitalisation of the visa procedure

Under new rules from 2023, applications for Schengen visas will be made through an online EU platform. The system will automatically decide which EU country will handle an application. Digital visas will be issued once the online platform has been put in place, which is expected to take a few years.

Further information

• Free movement of persons, EU Fact Sheets, European Parliament, June 2025
• State of the Schengen area, Briefing, European Parliamentary Research Service, May 2025
• Schengen, European Commission, February 2025
• Revision of the Schengen Borders Code, European Parliamentary Research Service, Briefing, July 2024

Keep sending your questions to the Citizens’ Enquiries Unit (Ask EP)! We reply in the EU language that you use to write to us.

Written by Clément Franzoso.

The European Citizens’ Initiative (ECI) is an important tool of participatory democracy in the European Union (EU), which gives Europeans a more active role in shaping EU policy. The initiative allows citizens to call on the European Commission to make new proposals for EU legislation if they gather at least one million signatures from at least seven EU Member States. Since its introduction under the Lisbon Treaty, the ECI has promoted political engagement, raised awareness of key issues and strengthened the EU’s democratic legitimacy. However, it faces significant challenges, such as difficulty gathering the required support, low public awareness, bureaucratic hurdles and a lack of binding outcomes.

To be registered, an initiative must meet a set of formal criteria assessed by the Commission. If it does, the Commission registers the initiative, and the organisers can then begin collecting signatures. It is important to note that the Commission is not obliged to act on registered ECIs, which ultimately limits the potential impact of the initiative.

While the ECI promotes cross-border collaboration and increases citizen participation, its potential is hindered by limitations such as the complex administrative process and lack of guaranteed legislative action. The Commission plays a decisive role in both the registration and follow-up stages of an ECI, but its strict interpretation of admissibility requirements has drawn criticism. Examples of successful initiatives include ‘Right2Water’, which advocates for the human right to water and sanitation, and ‘Stop Vivisection’, which calls for an end to animal testing in the EU.

While the ECI has helped raise awareness and foster political participation, its overall effectiveness remains constrained. Improvements in accessibility, awareness, follow-up actions and support are essential to unlock its full potential as a tool for active citizenship in the EU.

Read the complete briefing on ‘Assessing the potential and challenges of the European Citizens’ Initiative‘ in the Think Tank pages of the European Parliament.

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A paid traineeship will enhance your education and your vocational training and will provide you with an insight into the work of the European Parliament and the EU institutions. Find more info on the application criteria and process here.

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Written by Polona Car.

The Data Act aims to create value from data generated by connected products and services, by introducing data-sharing obligations. The principles enshrined in the Act have received general approval, but concerns have been expressed about the clarity of certain definitions, the sharing of commercially sensitive data and its regulatory complexity. Most provisions of the Data Act will apply from 12 September 2025.

Why it matters

Combining data with next-generation connectivity and emerging technologies can boost productivity, improve citizens’ health and wellbeing, and enhance public services. The EU’s data economy is projected to reach €630 billion this year, accounting for 4.7 % of the EU’s GDP. Forecasts suggest it will range between €743 billion and €908 billion by 2030. To unlock the full potential of data, the European Commission introduced the European strategy for data in 2020. This initiative aimed to create a single market for data, ensuring the EU’s competitiveness and data sovereignty. The strategy’s core components were the Data Governance Act (DGA) and the Data Act.

The Data Act in short

While the Data Governance Act establishes a new data governance model, enabling voluntary data sharing across the EU, the Data Act clarifies the rules for creating value from data and introduces data-sharing obligations. The Data Act grants businesses and legitimate users of connected products and services the right to access the data – both personal and non-personal – generated through their use. This concerns, for example, data from smart home appliances or industrial data. Manufacturers must ensure the exercise of these rights and create a secure, timely and interoperable data access. This means that manufacturers do not have exclusive rights over data generated by connected machines and devices, which would encourage competition and innovation and improve service options for consumers. Access to data could also enable machine-learning technologies, such as artificial intelligence, to use such data for improving supply-chain management or industrial and agriculture production processes.

The data-sharing obligation gives users the right to transfer their data. For example, they can share it with a repair provider other than the device maker, which could create more competition in the after-sale market and extend the lifespan of machines and devices. However, the data-sharing obligation protects confidentiality, and manufacturers can stop sharing or refuse to share data if it risks exposing trade secrets.

The Data Act introduces new requirements on cloud service providers to ensure customers can easily switch between different providers. It also gives the public sector access to private companies’ data in exceptional cases, such as public emergencies, or to fulfil a specific task defined by law (e.g. statistics) or for specific research purposes. In addition, the Data Act includes safeguards against unlawful international transfers of non-personal data, and promotes the development of interoperability standards for data sharing and processing, using Common European data spaces. Most provisions of the Data Act will apply from September 2025. The obligation to design connected products in a way to make data directly available to users will apply from September 2026 and removal of cloud switching fees from January 2027.

Challenging implementation

Stakeholders generally welcomed the Data Act, but some major tech companies opposed it. One of the main concerns remains the complexity of digital regulation and offering clear definitions. Even though the Data Act preserves trade secrets and includes a safeguard to prevent development of competing products from data accessed from connected products, industry did not embrace sharing of data with enthusiasm. Companies can still challenge data-sharing refusals based on protection of trade secrets, which creates uncertainty. That is why startups, scaleups and SMEs, in particular, favour an approach adapted to the size of the company, which protects innovation while increasing access for users.

A burden or an opportunity for small companies?

Adapting to the new requirements could represent  costs and administrative burdens for small and medium-sized enterprises (SMEs), although the Data Act aims to help SMEs access data held by large companies, encouraging data-driven innovation. To support this, the EU has developed model contractual terms (MCTs) for data sharing and standard contractual clauses (SCCs) for cloud computing. These voluntary tools will help smaller companies to negotiate and protect them from unfair contracts. MCTs and SCCs were adopted by the Commission expert group and the Commission ‘shall develop and recommend’ them ‘before 12 September 2025‘. They define the roles and responsibilities of data holders and users, compensation for data access and protection of trade secrets. As such, they provide legal clarity in complex data-sharing relations. SMEs, which often lack resources to draft complex contracts, can use these templates directly.

Clarity needed: Non-personal or personal, readily available, pre-processed?

The European Data Protection Board has raised concerns about the legal clarity of the draft MCTs. Its comments relate to the interplay between the Data Act and the General Data Protection Regulation (GDPR). The Data Act complements the GDPR but does not override it, and when personal data is concerned the GDPR prevails. Therefore, clarity in defining who is the data holder and user and which data is considered personal and which non-personal, is decisive. Experts note that roles, rights and obligations remain unclear. Consequently, companies must carefully decide which law applies when users submit data requests, to ensure compliance. Moreover, according to other experts, the type of data that is within the scope of the law is also ambiguous. Definitions such as data being ‘readily available without disproportionate effort’ lack clarity, and the difference between data that is pre-processed (within the scope of the law) and processed (outside its scope) also seems vague.

Importance of enforcement

Under the Data Act, Member States need to appoint competent authorities to enforce the law, but only a few countries have done this so far. Data protection authorities retain competence for addressing breaches of personal data rules. Member States can appoint the same authority for the enforcement of two regulations simultaneously: for example, the GDPR and the Data Act regulations, the AI Act and Data Act, or a new, separate authority for the enforcement of the Data Act. Creating new authorities risks inconsistent enforcement, as different bodies interpret the rules differently, so a single authority would simplify compliance for companies. National interpretations and enforcement will ultimately shape the law’s impact. While this creates an additional uncertainty regarding its practical application, stakeholders note that it also offers an opportunity to shape the enforcement landscape.

What’s next?

As part of the digital package, the Commission has announced a new European Data Union Strategy. The strategy aims to simplify the EU’s digital regulatory framework and boost data sharing by leveraging data to enhance competitiveness. It remains to be seen to what extent the Data Act will be part of the simplification strategy. Several major companies have requested the Commission to revise the Data Act and postpone its application, as part of this strategy.

Read this ‘at a glance’ note on ‘Data Act: Data sharing and competitiveness‘ in the Think Tank pages of the European Parliament.

Written by Clare Ferguson and Katarzyna Sochacka.

The highlight of the September 2025 session was the debate on the State of the Union, following Ursula von der Leyen’s first address under her current mandate as President of the European Commission. Another important debate took place to express Parliament’s solidarity with Poland following Russia’s deliberate violation of Polish airspace, added to the agenda in reaction to drone attacks the previous day.

Maia Sandu, President of the Republic of Moldova addressed Parliament in a formal sitting. On external policy, Members debated: EU action to ensure security guarantees and a just peace for Ukraine; the situation in Gaza; strengthening Moldova’s resilience against Russian hybrid threats and malign interference; the violence against protesters in Serbia; and the situation in Colombia following recent terrorist attacks.

Among other debates were: implementation of the recent EU-United States trade deal; the need for a strong European Democracy Shield to enhance democracy, protect the EU from foreign interference and hybrid threats, and protect electoral processes in the EU; serious threats to aviation and maritime transport from global navigation satellite system interference; the rule of law and management of EU funds in Slovakia; and the devastating wildfires in southern Europe and summer of heatwaves in the EU.

Cohesion policy

Members held a joint debate and later adopted three reports from Parliament’s Committee on Regional Development (REGI) calling for increased EU cohesion policy support for citizens. The first proposed strengthened cohesion policy support for regions most affected by the need to transition towards a climate-neutral economy. Acknowledging that geopolitical shifts are disrupting the economy, the committee recommends prioritising just transition funding for areas where traditional industries are disappearing, and calls for continued and increased cohesion policy funding for a just transition, beyond 2027. It also proposed simplifying access to cohesion funding, establishing special economic zones, and greater investment in education and training. The second REGI report recommended increased and more flexible cohesion policy funding for housing, beyond the current focus on social housing and energy efficiency. As housing availability has become a major issue throughout the EU, the committee also suggested cohesion policy funding for housing prioritises increased access to housing, through innovative approaches that increase affordability. Finally, the third report considered plans to simplify EU cohesion funds more generally, where the REGI committee sought assurance that modernisation to improve implementation can be carried out without sacrificing the current focus on long-term investment and place-based rationale. The report reiterated the importance of local involvement in programming, delivering and monitoring projects, and recommended simplifying cohesion funds by earmarking resources for integrated territorial development tools, direct funding for cities, and eliminating duplication of national oversight.

Future of agriculture and the post-2027 CAP

In line with the EU’s simplification priority, several files on the agenda focused on streamlining EU policy and cutting red tape. One such initiative responded to the need to simplify EU funding, as well as to widespread farmer protests, by proposing new rules for the common agricultural policy (CAP) from 2028. Members adopted a report from the Committee on Agriculture and Rural Development (AGRI) that opposes the Commission’s plans to include agricultural funding in a single fund covering structural and cohesion policy, fisheries, security and defence. The AGRI committee suggested increasing funding for agriculture in the post-2027 CAP budget instead, and to reinforce direct income support for farmers, regardless of their size, as well as increasing support for smaller and family-run farms.

Public procurement

National, regional or local public bodies spend around €2 trillion of citizens’ contributions per year in the EU through the public procurement process. Open public procurement in a competitive market should deliver good quality works or goods and services that represent value for money. However, complexity may have contributed to a decline in competitive procedures where EU rules apply to contracts above a certain threshold. Members debated a report from Parliament’s Internal Market and Consumer Protection Committee (IMCO), which calls on the Commission to simplify the procedures to make it easier for companies to bid for such contracts. The IMCO report also highlights the need to uphold social and environmental standards and support local economic development through public procurement rules.

2023 and 2024 Commission reports on Ukraine

Following a statement by the High Representative of the Union for Foreign Affairs and Security Policy/Vice-President of the Commission on EU action to ensure security guarantees and just peace for Ukraine, Members also debated and adopted a Committee on Foreign Affairs (AFET) report on the Commission’s 2023 and 2024 reports on Ukraine. The committee noted Ukraine’s consistent commitment to its European path, despite Russia’s war of aggression, and stressed the need for a peaceful solution that respects the will of the Ukrainian people. It also called for an EU contribution to robust security guarantees for Ukraine, and recommended opening negotiating clusters. Nevertheless, the AFET committee also emphasised that Ukraine needs to step up its fight against corruption, including by granting greater independence to the Specialised Anti-Corruption Prosecutor’s Office.

Revising rules on food and textile waste

In the EU, we waste 60 million tonnes of food, and 12.6 million tonnes of textiles, every year. To protect the environment and ensure the sustainable use of our resources, the Commission has proposed to update the Waste Framework Directive. Members adopted a provisional agreement, reached between Committee on the Environment, Public Health and Food Safety (ENVI) and Council negotiators earlier this year. The agreed text introduces binding food waste reduction targets, where Parliament succeeded in ensuring the rules will facilitate donations of unsold food. The revised Waste Framework Directive also includes new, harmonised extended producer responsibility rules covering fast fashion practices for all producers – even if not based in the EU – except, on Parliament’s insistence, those involved in reuse and recycling.

Taxation of large digital platforms in light of international developments

On behalf of the Economic Affairs (ECON) Committee, Members asked questions of the Commission regarding the fair taxation of large digital platforms. As international corporate tax rules were comprehensively overhauled under the umbrella of the Organisation for Economic Co-operation and Development in 2021, Members asked the Commission if a unilateral EU-level digital tax could be considered in the absence of an international agreement on taxation of digital platforms. Currently, under Pillar One, countries where customers or users are located are granted the right to tax a share of those profits, irrespective of the company’s physical presence. Pillar Two establishes a 15 % minimum effective corporate tax rate for multinational companies. While Pillar Two is in force in the EU since 2024, Pillar One has yet to be enforced, as the US argues it disproportionately targets American firms.

Opening of trilogue negotiations

One decision to enter into interinstitutional negotiations from the AGRI committee, on unfair trading practices in business-to-business relationships in the food supply chain: cooperation among enforcement authorities, was approved by a vote.

Another, from the Committee on Fisheries (PECH) on the subject of a General Fisheries Commission for the Mediterranean, was approved without vote.

Read this ‘at a glance’ note on ‘Plenary round-up – July 2025‘ in the Think Tank pages of the European Parliament.

Written by Marco Centrone and Jérôme Saulnier with Maxim Baumgaertel.

Military mobility, defined as the capacity of armed forces to swiftly move troops and equipment across the European Union (EU), is a crucial but long-overlooked aspect of European defence. After decades of underinvestment and unresolved obstacles, there is a need to intensify coordinated and integrated efforts at EU, North Atlantic Treaty Organization (NATO) and Member State level to increase resources and address physical, legislative, and regulatory barriers that continue to cause delays and disruptions for military forces. Failure to act would leave armed forces unprepared in the face of threats, and undermine the security of citizens. Ultimately, this could jeopardise the EU’s ability to demonstrate credible deterrence and achieve defence readiness.

Upcoming initiatives at EU level represent an opportunity to finally adopt a comprehensive approach to military mobility. Clear added value could be provided by not only increasing targeted investment in dual-use infrastructure and reducing regulatory burdens, but also addressing issues in related security and defence domains that clearly impact military mobility decisions, including investment in cybersecurity, logistics hubs, stockpiling and transport innovation to enhance the security and resilience of military networks.

For current ambitious defence initiatives, allocating sufficient budgetary resources is essential. This briefing looks within and beyond the current framework and explores the potential impact of additional investment of between €75 billion and €100 billion until 2035 to improve the current state of infrastructure. Our analysis finds that the added value associated with a larger amount of funds invested collectively leads to benefits which are almost three times higher (€21 billion additional GDP per year in 2035) than when Member States invest separately and in an uncoordinated way.

Read the complete briefing on ‘Towards a comprehensive and beneficial approach to military mobility‘ in the Think Tank pages of the European Parliament.

CEF military mobility funding by transport mode

Written by Pieter Baert.

CONTEXT

On 16 July 2025, the European Commission proposed a revision to the Tobacco Taxation Directive, alongside modifications to the general Excise Duty Directive. The aim is to restore the effectiveness of EU-wide minimum tax rates on tobacco products and extend their scope to cover new product types. The initiative aims to support the EU’s goal of a tobacco-free generation by 2040, recognising taxation as a key tool in reducing tobacco use.

LEGISLATIVE PROPOSAL

2025/580 (CNS) – Proposal for a Council Directive on the structure and rates of excise duty applied to tobacco and tobacco related products (recast) – COM(2025) 580, 16.07.2025

2025/0581(CNS) – Proposal for a Council Directive amending Directive (EU) 2020/262 as regards the general arrangements for excise duty in respect of tobacco and tobacco related products – COM(2025) 581, 16.07.2025

NEXT STEPS IN THE EUROPEAN PARLIAMENT

For the latest developments in this legislative procedure, see the Legislative Train Schedule:

• 2025/0581(CNS)
• 2025/580(CNS)

Read the complete briefing on ‘Revision of the Tobacco Taxation Directive‘ in the Think Tank pages of the European Parliament.