Something else disturbing is how much European governments trust Microsoft/Azure. They are normally allergic to US big tech but Microsoft has somehow convinced European governments to hand out their citizens data.
European governments do not "trust" Azure. Data localization policies are mandated by law for many sectors (finance, health) and data export to U.S. in general is banned in EU. Due to Schrems I, Schrems II rulings data flows to U.S. out of EU are largely illegal. Due to TADPF these flows are now quasi-legal, but the deal announced by Commission will be struck down in CJEU in similar fashion as they were before.
I imagine that is because Microsoft bends the knee and pays fines to Europe every few years and complies with its orders. The Microsoft software/services the USA see's is different to the Microsoft Software/Services the EU sees.