How European Municipalities Can Enable Digital Transformation Without Compromising Citizen Data Sovereignty
European municipalities are under simultaneous pressure to digitize citizen services and protect citizen data from foreign government access. Germany’s OZG 2.0 (Online Access Act) requires digital availability of central administrative services by end of 2025, with 70 to 80 percent of implementation falling on municipalities. The EU’s Digital Decade program targets 100% online availability of all public services by 2030. France, Denmark, the Netherlands, and Belgium have each established national digitalization strategies that push requirements down to the municipal level.
Meanwhile, the data sovereignty movement is accelerating at the same pace. The EU Cloud Sovereignty Framework, published in October 2025, establishes eight Sovereignty Objectives that apply to cloud services procured by public institutions. The European Parliament’s report on technological sovereignty calls for specific award criteria in public procurement to reduce critical digital dependencies. The municipality of Amsterdam and the Dutch Ministry of Justice discovered in late 2025 that their deliberate choice of a Dutch cloud provider, Solvinity, was undermined when the American IT services company Kyndryl announced its acquisition, placing citizen authentication systems and government service portals under potential CLOUD Act reach.
This guide examines how European municipalities can pursue digital transformation for citizen services while maintaining sovereignty over the sensitive data that flows through their file sharing, email, and communication platforms.
Executive Summary
Main Idea: European municipalities must digitize citizen services under national e-government mandates while protecting citizen data from foreign government access. The practical challenge is not the digitization itself but the data exchange layer beneath it: the file sharing, email, managed file transfer, and web form platforms through which citizens submit applications, municipalities share documents between departments, and agencies communicate with regional and national authorities. When this communication layer runs on platforms controlled by US-headquartered providers, sovereignty is compromised regardless of how well the citizen-facing portal is designed.
Why You Should Care: Municipal IT directors and data protection officers face budget constraints, legacy system dependencies, and limited specialist staff, but they also face growing political pressure to demonstrate digital sovereignty. The Amsterdam/Solvinity case demonstrated that even deliberate sovereign sourcing decisions can be reversed by market forces. Schleswig-Holstein’s migration of 30,000 civil servants to open-source alternatives shows that sovereign transitions are achievable but require strategic focus on data governance architecture, not just front-end tools. Municipalities that address the communication and file exchange layer first can demonstrate sovereignty progress while meeting digitalization mandates.
5 Key Takeaways
- E-government mandates create digitization urgency, but the data exchange layer determines sovereignty. Germany’s OZG 2.0, the EU Single Digital Gateway Regulation, and national digitalization programs require digital service availability. How the underlying data moves between citizens, departments, and agencies is where sovereignty is won or lost.
- Citizen data in municipal systems is politically sensitive and personally identifiable. Birth registrations, building permits, social benefit applications, tax records, and resident registrations constitute some of the most sensitive personal data any government holds. Foreign government access to this data is a political liability no municipal leader wants to explain.
- The Amsterdam/Solvinity case exposes the fragility of provider-based sovereignty strategies. Selecting a domestic provider does not guarantee long-term sovereignty when that provider can be acquired by a non-EU entity. Sovereignty must be architecturally enforced through customer-controlled encryption so that ownership changes do not affect data protection.
- Municipalities can achieve sovereignty incrementally by prioritizing the communication layer. Full infrastructure migration is expensive and disruptive. Targeting the file sharing and communication platforms that handle the most sensitive citizen data delivers measurable sovereignty improvement with manageable scope.
- The EU Cloud Sovereignty Framework provides procurement language municipalities can adopt. The framework’s eight Sovereignty Objectives and SEAL scoring methodology are designed for public sector procurement. Municipalities can reference these criteria in their tender specifications to evaluate providers consistently, even with limited technical procurement capacity.
The Digital Transformation Challenge for Municipalities
National E-Government Mandates Pushing Digitization Down
European municipalities operate under escalating digitization requirements from national and EU-level mandates that leave limited room for delay.
In Germany, the OZG 2.0 (Onlinezugangsgesetz Änderungsgesetz), which took effect in June 2024, requires end-to-end digitalization of administrative services. The law obligates municipalities to process applications, communications, and decisions digitally from submission through delivery. Over 820 online services are now connected to the OZG Cloud in Schleswig-Holstein alone, with Bavaria piloting deployment across more than 1,400 municipalities. The OZG 2.0 reinforces citizens’ right to digital administration while emphasizing data control and digital sovereignty as design principles.
In France, the Programme national de la dématérialisation drives municipal digitization with particular emphasis on identity verification and document exchange. Denmark’s joint public digitalisation strategy coordinates digital service delivery across central, regional, and local governments, with solutions like Digital Post and MitID forming the infrastructure backbone. The Netherlands’ Dutch Digitalisation Strategy aims to operate government as one unified entity providing accessible digital services, while Belgium pursues parallel strategies across its Flanders, Wallonia, and Brussels regions.
At the EU level, the Single Digital Gateway Regulation requires member states to make procedures available online for cross-border users, and the Digital Decade Policy Programme targets 100% online availability by 2030. The 2025 eGovernment Benchmark found that 93% of Single Digital Gateway procedures are now available online, demonstrating accelerating progress but also expanding the surface area of citizen data flowing through digital platforms.
What Data Compliance Standards Matter?
Where Citizen Data Actually Flows
Municipal digital transformation extends far beyond citizen-facing portals. Behind every online service is a chain of data exchanges that determines where citizen information actually resides and who can access it.
When a citizen submits a building permit application through a municipal portal, the supporting documents (architectural drawings, property records, environmental assessments) must be shared between the planning department, building inspectors, environmental services, and potentially regional authorities. When a social benefit application is processed, personal financial information, family documentation, and health records move between social services, tax offices, and sometimes employment agencies. When municipal employees communicate about pending cases, citizen details flow through email systems and collaboration platforms.
Each of these data movements represents a sovereignty decision. If the file sharing platform, the email system, or the managed file transfer service that moves documents between agencies is operated by a provider subject to foreign government access laws, the sovereignty of every citizen record that passes through it is compromised. The citizen-facing portal may be impeccably sovereign, but the back-office communication layer determines the actual jurisdiction governing citizen data.
Why Current Approaches Fall Short
The Provider Acquisition Problem
The Amsterdam/Solvinity case in November 2025 illustrates a structural vulnerability that affects municipalities across Europe. Amsterdam and the Dutch Ministry of Justice had specifically chosen Solvinity, a Dutch managed cloud provider, to reduce dependence on American firms and mitigate CLOUD Act risks. Solvinity manages critical national infrastructure including the Netherlands’ citizen authentication system and government service portal. When Kyndryl, an American IT services company, announced its intention to acquire Solvinity, these systems were placed within the potential jurisdiction of US surveillance law, directly contradicting the sovereignty rationale behind the original procurement decision.
This scenario is not unique. European cloud providers are acquisition targets for larger non-EU firms precisely because of their government client relationships. A sovereignty strategy that depends on the provider’s current ownership structure rather than on architectural controls can be rendered ineffective by a single corporate transaction that the municipality has no power to prevent.
The “EU Region” Misconception
Many municipalities use collaboration and file sharing platforms from US-headquartered providers, with data stored in EU data center regions. As the EU Cloud Sovereignty Framework makes explicit, data location and data sovereignty are different things. A US provider operating a Frankfurt data center remains subject to the CLOUD Act. The provider can be compelled to produce citizen data stored in that data center under US legal authority without notifying the municipality. The geographic location of the server provides no legal protection when the provider’s corporate obligations run through a different jurisdiction.
Budget and Capacity Constraints
Unlike national agencies or large enterprises, municipalities operate with constrained IT budgets and limited specialist staff. A mid-sized German municipality might have an IT department of five to fifteen people responsible for dozens of applications and hundreds of users. Full infrastructure migration to sovereign alternatives is often beyond available resources. Municipalities need approaches that deliver sovereignty for their most sensitive data flows without requiring wholesale platform replacement across every function.
A Practical Sovereignty Strategy for Municipalities
Prioritize the Communication Layer
The highest-impact sovereignty intervention for most municipalities is securing the platforms through which sensitive citizen data moves between people and systems. This includes the file sharing platform used to exchange citizen documents between departments, the email system through which case-related communications occur, the managed file transfer service that moves data between municipal systems and regional or national authorities, and the web forms through which citizens submit sensitive documentation.
These communication channels handle the data that is most politically sensitive (citizen personal records), most regulated (GDPR special categories), and most exposed to foreign access risk (flowing through provider-operated platforms). Securing them with sovereign architecture addresses the highest-risk data flows first while leaving less sensitive systems on existing platforms until resources allow broader migration.
Architectural Requirements for Municipal Sovereignty
Three technical capabilities deliver verifiable sovereignty for municipal communication platforms.
Customer-controlled encryption keys. The municipality generates and retains encryption keys in its own key management system or hardware security module. The platform provider processes encrypted data but cannot decrypt it. This provides sovereignty that survives provider acquisition, ownership changes, and foreign legal compulsion because the provider cannot produce what it does not hold. This is the single most important architectural decision for municipal data sovereignty.
Single-tenant European deployment. The platform runs on dedicated infrastructure serving only the municipality, not on a shared multi-tenant platform where citizen data coexists with data from other organizations under different jurisdictional arrangements. For municipalities that share IT services through regional partnerships (like Germany’s kommunale IT-Dienstleister), a single-tenant instance can serve the partnership while maintaining sovereignty for all member municipalities.
Policy-enforced data residency with audit evidence. Technical geofencing prevents citizen data from leaving designated geographic boundaries. Comprehensive audit logging records every access, transfer, and administrative action, providing the evidence that DPOs need for GDPR accountability and that elected officials need to demonstrate sovereignty to citizens and oversight bodies.
Aligning with the EU Cloud Sovereignty Framework
Municipalities can reference the EU Cloud Sovereignty Framework’s eight Sovereignty Objectives in their procurement specifications, even for smaller-scale procurements. For the communication layer, three objectives are particularly relevant: SOV-2 (legal and jurisdictional sovereignty) ensures the provider is not subject to non-EU government access demands; SOV-3 (data sovereignty) ensures the municipality controls encryption and data processing; and SOV-4 (operational sovereignty) ensures service operations are conducted under EU jurisdiction. Setting minimum SEAL levels for these three objectives in tender documents provides a structured, defensible evaluation methodology that even municipalities with limited procurement resources can apply.
Learning from Municipal Sovereignty Pioneers
Schleswig-Holstein: Open Source as Sovereignty Foundation
The German state of Schleswig-Holstein has undertaken the most ambitious sovereign IT migration in European public administration, replacing Microsoft products with open-source alternatives for its 30,000 civil servants. By mid-2025, the state had transitioned 24,000 employees to LibreOffice, with Nextcloud, Open Xchange, and Thunderbird replacing Exchange and Outlook. The state’s OZG Cloud, developed as an open-source platform, serves over 50% of Schleswig-Holstein’s municipalities and provides access to more than 820 connected online services.
In July 2025, Germany, France, Italy, and the Netherlands established the European Digital Infrastructure Consortium for Digital Commons to jointly develop and scale sovereign digital tools like OpenDesk. This cross-border collaboration signals that municipal-level sovereignty solutions are becoming a shared European priority rather than isolated national experiments.
France: NUBO and Sovereign Cloud for Public Administration
France’s Ministry of Economics and Finance completed NUBO, an OpenStack-based private cloud initiative designed to handle sensitive data and services. France’s SecNumCloud certification mandates sovereignty requirements for public sector cloud procurement, creating a certification framework that municipalities can reference when selecting providers. The Bleu partnership (Orange and Capgemini operating Microsoft technologies under French sovereignty requirements) demonstrates one approach to maintaining productivity tool access while addressing sovereignty concerns, though the degree of actual independence from US technology dependencies remains a question municipalities should evaluate carefully.
Municipalities That Control Citizen Data Build Citizen Trust
Municipal governments are the closest level of administration to citizens. Residents interact with their municipality for life events that are deeply personal: registering a birth, applying for social support, filing tax information, obtaining building permits, registering a death. When municipal leaders can tell their citizens that this data is protected by European law, encrypted with keys the municipality controls, and inaccessible to foreign governments, they build a trust relationship that extends beyond any single service or interaction.
Digital transformation and data sovereignty are not competing priorities. They are complementary. A municipality that digitizes services on sovereign infrastructure delivers both the convenience citizens expect and the protection citizens deserve.
Kiteworks Helps European Municipalities Enable Digital Transformation Without Compromising Citizen Data Sovereignty
The Kiteworks Private Data Network provides municipalities with the sovereign communication layer they need to digitize citizen services while keeping citizen data under European control. Kiteworks operates on a customer-managed encryption model where the municipality generates and retains encryption keys in its own key management system. Kiteworks cannot access decrypted content and cannot comply with foreign government demands to produce readable citizen data because it does not possess the keys.
Kiteworks deploys as a single-tenant instance on dedicated European infrastructure, with options for on-premises deployment, private cloud, or regional IT service provider hosting. This flexibility accommodates the diverse IT arrangements municipalities use, from fully in-house operations to shared services through kommunale IT-Dienstleister or equivalent regional partnerships. Built-in geofencing enforces data residency at the platform level, and comprehensive audit logging provides the accountability evidence that GDPR compliance and municipal oversight require.
The platform unifies secure file sharing, email protection, managed file transfer, and web forms under a single zero trust governance framework, enabling municipalities to secure citizen data across all exchange channels with one procurement decision, one architecture, and one set of sovereignty evidence for elected officials, DPOs, and oversight bodies.
To learn more about enabling digital transformation without compromising citizen data sovereignty, schedule a custom demo today.
Frequently Asked Questions
Municipalities should focus sovereignty efforts on the communication and file exchange layer rather than attempting full infrastructure migration. The platforms that handle citizen document sharing, interagency email, managed file transfer, and web form submissions process the most sensitive data and are the most exposed to foreign access risk. Securing these channels with customer-controlled encryption and European deployment provides the highest sovereignty return for constrained budgets. Less sensitive functions can remain on existing platforms until resources allow broader migration.
In November 2025, the American IT services company Kyndryl announced its intention to acquire Solvinity, a Dutch managed cloud provider chosen specifically by Amsterdam and the Dutch Ministry of Justice to avoid CLOUD Act exposure. The acquisition placed critical national infrastructure, including citizen authentication and government service portals, within potential US legal jurisdiction. The lesson for municipal procurement is that sovereignty cannot depend on provider nationality alone. Municipalities need architectural sovereignty through customer-controlled encryption, so that corporate ownership changes do not affect data protection.
The OZG 2.0, effective June 2024, requires municipalities to provide end-to-end digital administrative services while emphasizing citizen data control and digital sovereignty as design principles. The law reinforces citizens’ right to digital administration, meaning municipalities must digitize but must also ensure citizen data is properly protected throughout the process. OZG 2.0’s emphasis on digital sovereignty aligns with Germany’s 2022 government cloud strategy, which prefers open-source solutions to reduce dependency on proprietary software. Municipalities can meet both digitization and sovereignty requirements by deploying sovereign file sharing and communication platforms for the back-office processing that OZG services depend on.
Yes. The European Commission explicitly designed the Cloud Sovereignty Framework as a reference point that national authorities and private organizations can use for their cloud strategies. The framework’s eight Sovereignty Objectives and SEAL scoring methodology provide structured evaluation criteria that municipalities can incorporate into tender specifications. For municipal procurement, the most relevant objectives are SOV-2 (legal sovereignty), SOV-3 (data sovereignty), and SOV-4 (operational sovereignty). Setting minimum SEAL levels for these objectives provides defensible evaluation criteria even for municipalities with limited procurement expertise.
Schleswig-Holstein’s migration demonstrates that sovereign transitions are feasible at scale, having transitioned 24,000 of 30,000 civil servants to open-source alternatives and deployed the OZG Cloud to over 50% of its municipalities. The July 2025 establishment of the European Digital Infrastructure Consortium for Digital Commons by Germany, France, Italy, and the Netherlands signals that this approach is becoming a shared European strategy. Other municipalities can draw lessons about phased migration, parallel operations during transition, and the importance of separating front-end tool decisions from back-end data sovereignty architecture. Sovereign communication platforms can be deployed alongside existing systems without requiring simultaneous full-stack migration.
Additional Resources