New EU Council President Prioritizes AI, Chips, Digital Identity Legislation

On July 1, the Czech Republic took over the presidency of the Council of the European Union from France — and for the next six months, it will set the priorities for the EU’s political agenda. On Wednesday, July 6, Czech Prime Minister Petr Fiala presented in the EU Parliament the program of the Czech Council Presidency’s semester.

The Council of the European Union is one of the three institutions in Europe involved in the legislative process, together with the European Commission and the EU Parliament. While the Council cannot adopt legislation on its own, as it needs to reach agreements with the EU Parliament, it has significant weight to push the legislative agenda of the bloc in one direction or another. For instance, France was very keen in adopting new regulation to tame the power of large online platforms and to provide a comprehensive regulatory framework for crypto assets, accomplishing both goals. Such was the push from France, that the three institutions reached an agreement on the Markets in Crypto Assets Regulation on the last day of the French presidency, on June 30.

The Czech presidency will be marked by the conflict in Ukraine, the refugee crisis and the need to break EU’s dependence on Russian gas, oil and coal. But putting the armed conflict aside, the Czechs are bringing renewed efforts to push for the approval of key legislation that will help the European economy to navigate uncertain times. Unlike the French presidency, which focused on legislation that sought to control non-European companies operating in the EU like Big Tech firms and crypto asset providers, the Czech Republic will focus on new legislation that will make sure that EU companies have access to strategic raw materials and components and can operate on secure IT supply chains, and that the whole EU accelerates the digitalization and automation of its industry.

The first priority will be to adopt the European Chips Act, which will provide funding for new semiconductor factories in Europe, new training programs to create talent and other incentives to ensure EU companies are not disrupted by supply chain issues.

Read more: European Chips Act Brings $12.6B to Companies Producing in EU

The second priority will be to get an agreement on the scope of the Artificial Intelligence Act. This proposal is in the EU parliament, and policymakers have made great progress — but given the number of amendments to the text, it is not a given that the new rules will be adopted before the end of the Czech presidency. The AI Act will set some standards that will need to be observed by EU and non-EU companies. The EU has previously said that although the EU is not a superpower on AI, they still want to contribute to set global standards on this field according to the EU values.

Read more: EU Parliament Discusses AI Act With Agreement in Sight

The third priority is about data and digital identity. As the EU wants to move towards a more digitalized society, including regulators, companies, industry and public administrations, regulators are working on different initiatives to create an open-data society. The new president of the Council will likely push for the adoption of a pan-European tool to prove a citizen’s identity, the so-called European Digital Wallet. This would allow citizens to identify themselves, not only in physical offices, but also online. For FinTech and payments companies, this could facilitate the onboarding process of new customers and simplify Know-Your-Customer programs, which eventually could have an impact on the levels of fraud or illicit payments.

But for the European Digital Wallet to become a reality, the EU needs new data rules governing how institutions and companies would use and have access to a new pool of data. The Data Act is another piece of legislation that the Czech presidency will likely push in parallel to the Digital Wallet. This new law will provide companies with more access to data, including data from non-EU companies, and it will provide citizens with more control of their data and who has access to it.

Read more: EU’s New Data Act May Compel US Firms To Share More Data