April 08, 2025: France and Germany are delaying progress on the European Union’s proposed digital identity wallet, citing unresolved concerns over data sovereignty, implementation architecture, and regulatory control. The European Digital Identity (EUDI) initiative, designed to provide citizens with a secure, interoperable digital ID across all 27 EU member states, faces pushback from the bloc’s two largest economies during final-stage negotiations.

Officials in Paris and Berlin have raised objections to the wallet system’s technical structure, particularly the degree of centralized credential management and its alignment with national identity infrastructure. French authorities have insisted on retaining strict control over citizen data access and authentication protocols, while Germany has expressed concern over interoperability standards and potential conflicts with its existing ID framework.

The proposal championed by the European Commission would require all member states to issue digital identity wallets that can store and verify government credentials, banking access, health records, and professional qualifications, with full mutual recognition across borders. The wallet would also be usable for e-signatures, age verification, and online access to public and private services.

France and Germany have not opposed the principle of digital ID but are seeking amendments to limit third-party data access and clarify the legal status of wallet providers under the GDPR and eIDAS 2.0 frameworks. Berlin has requested additional safeguards against commercial exploitation of user data by platform intermediaries.

The delay threatens to push back the EU’s 2026 target for full deployment, which is tied to digital transformation goals under the Digital Decade strategy. Industry stakeholders, including fintechs, cybersecurity firms, and mobile operators, are urging resolution, warning that continued uncertainty could stall private sector investment in wallet-integrated services.

The Commission has signaled openness to revising parts of the regulation to address member state concerns but insists that a minimum interoperability and security baseline must be preserved to prevent fragmentation. Negotiations continue under the Belgian presidency of the Council of the EU, with a final text expected to be tabled before the summer.