The Justice and Home Affairs Council on 5 June 2026 failed to reach consensus on two major files: the EU Digital Identity Framework and the revision of the Schengen Borders Code. On digital identity, Germany, backed by Austria and the Netherlands, pushed back against the Commission's proposal for mandatory e-ID wallets for all citizens, arguing it could infringe on privacy and impose disproportionate costs on smaller member states. France and Spain, by contrast, advocated for a harmonised mandatory system to ensure interoperability. European Commissioner for Home Affairs Ylva Johansson defended the proposal as essential for digital sovereignty and security, but acknowledged concerns about implementation timelines.
On Schengen, a split emerged between southern member states (Italy, Greece, Malta) demanding stronger burden-sharing mechanisms for migration management, and northern states (Denmark, Sweden, Finland) insisting on stricter border controls to prevent secondary movements. The Council presidency noted that no consensus was reached and that the file would be referred to the next presidency for further negotiations.
Stakeholder impact: EU citizens face uncertainty over whether e-ID wallets will be mandatory or optional, affecting privacy and convenience. Tech companies developing e-ID solutions face diverging national requirements if the opt-in approach prevails, increasing compliance costs. Border authorities in southern states would benefit from stronger burden-sharing, while northern authorities would gain from stricter controls. Migrants could face more restrictive border regimes if northern states' preferences prevail.