I guess it's the thousand Euro minimum? CTRs in the US are min $10,000, but that doesn't seem like an overwhelming hurdle when the transaction is already being recorded somewhere. Most people auto-generate this stuff anyway.

What business is it of a government what I spend money on?

It's their tax business.

It's unusual for a government to ask for recordings of individual transactions. Tax forms tend to ask for aggregate numbers on quarterly or yearly boundaries.

VAT administration tends to require transaction data.

For sales tax based systems, total aggregate turnover is enough; but to monitor VAT you'd need at least the aggregate volume grouped by all your B2B (VAT paying) customers and suppliers.

Yes, but you are required to retain much more detailed records and produce them upon request.

In unusual circumstances, like an audit perhaps. Many small businesses go their entire existence without sharing detail level transactions with the government.

So, when it's proposed, it's unusual, and is worthy of concern.