Traceability for privacy: A foundational pillar for an effective and competitive EU digital rulebook

The European Union has established a comprehensive digital rulebook (GDPR, DSA, DMA, DGA, Data Act, AI Act), to develop a digital single market that respects fundamental rights. An investigation into this legal framework, however, reveals significant barriers to its effectiveness, including inconsistent enforcement, "gold-plating," and a burdensome compliance landscape for SMEs. This paper's analysis establishes that a standardized, interoperable, and privacy-preserving traceability layer is a critical infrastructural prerequisite to bridge the gap between legal principles and technical enforceability. Traceability, defined as the ability to document the data lifecycle and link processing to a verifiable legal basis, provides the necessary foundation for accountability, a gap in the institutional enforcement system. This paper conducts a legal-technical analysis, first establishing through a systematic review that traceability is a foundational requirement across the EU digital rulebook. Second, it compares technical architectures based on blockchains, attestations (OTrace) and cryptographic claims (W3C Verifiable Credentials). The analysis concludes that while public blockchains present GDPR compliance paradoxes and require workarounds, a careful merger of OTrace and VCs, and an operational framework synthesizing the EU Digital Identity Wallet and Data Governance Act data intermediaries offers a pragmatic, legally-aligned solution to the current institutional deficit. Finally, it connects this "EU-Trace" model to the EuroStack's strategic vision, concluding that a risk-based mandate for traceability can mitigate the negative effects of regulatory fragmentation by harmonizing the mechanism of compliance, thereby enhancing competitiveness for a transparent, accountable digital Europe.