EC Proposes a Framework for a European Digital Identity, Available to all EU Citizens and Businesses

The European Commission has proposed a framework for a European Digital Identity wallet which will be available to all EU citizens and residents, as well as to the businesses in the EU to prove their identity and grant access to services in the Member States.

European Digital Identity will help achieve the targets and milestones set out by the Commision in the Digital Compass 2030 – a tool that sets out the EU’s digital targets for the next decade. Its priorities include providing all key public services online, providing citizens with access to electronic medical records, and more. The European Digital Identity framework further supports the EU’s transformation into a digital single market, according to the official statement.

Opening a bank account, applying for a loan, renting a car, filing tax returns, buying a new SIM card, enrolling in a university are part of the examples given by the Commission for the use cases. It also states that citizens will be able to prove their identity when necessary to access online services, share digital documents or simply prove a specific personal attribute, such as age, without having to use private identification methods or unnecessarily share personal data

Why is European Digital Identity necessary

The Commission finds the European digital identity necessary to address the shortcomings of existing identification services. Currently the EU uses the so-called “eIDAS Regulation” for cross-border electronic identification and trusted electronic transaction services in the European single market. However, there is no requirement for Member States to develop a national digital ID and to make it interoperable with the ones of other Member States. According to the EC, this leads to high discrepancies between countries and deprivation from the benefits of the single market.

Other arguments include the lack of flexibility in the various cases of use of current electronic identifiers and the existing limitations and complexity for online providers to connect to the system. The Commission also points to the need for a single European approach, as practices at national level will lead to fragmentation and prevent interoperability and cross-border acceptance. It is also noted that the pandemic has intensified the digitalisation of services, which in turn has increased the demand from consumers and businesses for online identification and authentication tools.

What the framework offers

Amendment of the eIDAS Regulation: introduction of European digital identity to improve its effectiveness and extend its benefits to the private sector.
Digital wallets: Under the new Regulation, the EU Member States, through public authorities or private entities, will offer citizens and businesses digital wallets that will be able to link their national digital identities. These wallets may be used for storing and sharing proofs of other personal attributes (e.g. driving licence, diplomas, bank account, etc) in a digital format.
Voluntary use: the use of European digital identity wallets will be voluntary and will not replace existing national identities (eID), but rather extend their functionality.

The European digital identity:

– will be available to citizens and residents of the EU, as well as to businesses operating in the Union
– can be widely used to identify users or to prove certain personal qualities for the purposes of access to digital services
– will make it possible to choose what information is shared with third parties in terms of identity, data and certificates
– will have a high level of security determined by the Member States in accordance with the European Cyber ​​Security Certification Framework

As a next step, the European Commission requires Member States to establish a common toolbox by September 2022 and will assist them with the technical aspects of the European Digital Identity in parallel to working on the legislative process that will allow the service.

The financial resources required for the implementation of this project in the period 2022-2027 are expected to amount to about EUR 31 million, including EUR 9 million in administrative costs and up to EUR 22 million in operational costs covered by the Digital Europe Program (2021 -2027).