In my personal opinion, as a person living in West Europe the EU never liked crypto... They're always trying to make the rules more strict, force more KYC/AML, restrict us whenever they can. Will they back down? My gut feeling says they won't. They don't like what they cannot controll.
But then again, i don't have a crystal ball to predict the future, i could be completely wrong.
In general, western europe wants to take control, and that's clearly visible, just like you said. They're always looking for ways to tighten the rules and require KYC for every little move. Also, if you have a slightly larger transaction, you're immediately considered suspicious. That's how it is, and they're not wrong it's only going to get worse.