EU looks to tech sovereignty with EuroStack amid trade war

The looming trade war with the U.S. under Donald Trump is pushing Brussels’ policymakers to advocate for more tech sovereignty – including digital identity.

EU Technology Commissioner Henna Virkkunen has pledged to strengthen the sovereignty of  EU digital commons and the continent’s tech sector. Upcoming German chancellor Friedrich Merz has joined French President Emmanuel Macron’s calls for a sovereign Europe, while some European leaders are pushing for a Buy European Act which would also include tech products.

Among these debates is the concept of EuroStack, an attempt to build up a core technology infrastructure for Europe, including semiconductors, networks, AI, cloud computing, IoT, data platforms – and digital ID.

The idea is currently being promoted by a loose group of entrepreneurs, academics and policy experts. In a study published in February by the Bertelsmann Stiftung think tank, the group lays the vision for Europe’s common digital stack.

EuroStack: A 300 billion euro tech sovereignty plan

European countries do not own or control basic infrastructure such as communication networks, platforms, storage and identity services and underlying protocols and standards. This dependence carries many risks which aside from geopolitics also include data extraction, the report says.

In addition, European companies still rely on U.S. technology for algorithmic frameworks, vital for innovation and developer ecosystems, and for foundational tools such as operating systems.

“Software forms the operational core of digital infrastructure, encompassing operating systems, application platforms, and algorithmic frameworks,” the report notes. “It powers critical functions such as identity management, electronic payments, transactions, and document delivery, forming the foundation of digital public infrastructures.”

EuroStack could also help empower citizens and businesses through digital identity systems, secure payments and data platforms. It envisions digital IDs as the gateway to Europe’s digital infrastructure and a way to enable seamless access while safeguarding privacy and sovereignty according to EU regulations.

“By overcoming the limitations seen in models like India Stack, which rely on centralized biometric IDs and foreign cloud infrastructure, the EuroStack offers a federated, privacy-preserving platform,” the study explains.

EuroStack’s ambitious goals to support indigenous technology will require plenty of funds: As much as 300 billion euros (US$324.9 billion) for the next 10 years, according to the study. Chamber of Progress, a tech industry trade group that includes U.S. tech companies, puts the price tag even higher, at 5 trillion euros ($5.4 trillion).

But according to EuroStack’s proponents, the results are worth it.

“European leaders are slowly realizing that our industrial future, as well as our democracy and social cohesion, increasingly depends on Europe’s ability to rely on a trustworthy technology stack, ranging from compute infrastructure to digital identity, cloud and data,” says Andrea Renda, director of research at the Centre for European Policy Studies (CEPS) and one of the coauthors of the study.

India Stack as an inspiration

Other policy experts are calling on European technologists to look towards sovereign digital infrastructure made by India and Brazil for inspiration.

India and international institutions and organizations have been promoting the concept of Digital Public Infrastructure (DPIs). Its success was built on India’s Aadhaar digital ID system, universal payments interface and exchange layer that make up the India Stack.

Without explicitly using the terminology of DPIs, the EU has been creating a similar framework, the European Centre for Development Policy Management argues in a paper published in February. This includes the EU Digital Identity (EUDI Wallet).

“The EUDI Wallet will be central to developing an EU DPI offer,” the paper says. To advance its digital commons, however, the bloc should partner with other stakeholders developing DPI and widen the debate about sovereign digital infrastructure.

EU-US data transfers under magnifying glass

The ongoing tensions between the U.S. and EU are not just inspiring policy moves towards tech sovereignty, they are also putting personal data transfer deals between the two sides under question.

The Trump administration is contemplating withdrawing from the EU-U.S. Data Protection Framework (DPF), according to Euroactiv.

Adopted in 2023, the regulation states that the U.S. provides a level of protection for personal data transferred from EU companies that is adequate and comparable to EU standards.

The legality of the data flows between the two sides has been contested in European courts, with detractors arguing that the U.S. has not guaranteed independent oversight and redress mechanisms against surveillance from its intelligence agencies.

These complaints were finally addressed with a 2022 Executive Order from former U.S. President Joe Biden which introduced new safeguards ensuring that access to data by U.S. intelligence agencies is limited to what is necessary and proportionate.

In February, 19 members of the European Parliament called on the European Commission to examine whether the is still viable. The Commission has promised an answer by March 19th.

Article Topics

biometrics  |  data protection  |  digital ID  |  digital public infrastructure  |  Europe  |  EuroStack  |  investment  |  national security  |  research and development  |  tech sovereignty