How would this be enforced in practice? In other words, what would prevent E.U. users from using encrypted services outside of the jurisdiction of the E.U., to "illegally" encrypt their hard drives or to run their own private encrypted comms servers?
There is a long chain of actions that ends with you having e2e on your phone (or what not). At the starts of it there is your physical body living in jurisdiction and transacting with (mostly) other people being somewhat present in the same jurisdiction using government-captured money. There are multiply choke points, controlling which will not result in 100% enforcement, but will make whatever you want to do a huge pain in the ass, so most people will not bother (case in point -- jailbraking). Whoever is left self-selects themselves for selective enforcement.