Achieving technological sovereignty is one of the EU’s key priorities, not just in terms of its digital agenda, but also its strategic autonomy and place in the world.
At the beginning of the German Council Presidency in July, Chancellor Angela Merkel warned of Europe’s “digital dependence on third countries”. These comments echoed those made by European Commission President Ursula von der Leyen, a former cabinet member of the Chancellor, in her declaration that it was “not too late” to achieve technological sovereignty in “some critical technology areas”.
Rather than weaken this priority, the COVID-19 pandemic has demonstrated how reliant governments, businesses and citizens are on digital technologies. It has also illustrated how much work the EU must do in order to control its increasingly vital digital capacity, and ultimately its ability to exploit the wealth of its industrial data. This is seen as the bloc’s competitive advantage vis-à-vis the United States and China in the fourth industrial revolution.
While the debate over the sourcing of 5G technology showed how reliant the EU’s future telecoms infrastructure was on China, the COVID-19 crisis compounded the existing concentration of U.S firms in the EU’s cloud market. Seventy-five percent of the EU’s public cloud services are offered by the five largest global service providers—four of those are based in the United States, the other is Chinese.
This concern was a driving force behind the European Commission’s European strategy for data, which set out plans for a federated European cloud infrastructure. The European Commission hopes to secure €4-6 billion of financing for its project from Member States and private industry, along with €2 billion from its own coffers.
The German Presidency therefore seeks to place the EU’s digital sovereignty as a “leitmotiv” of their policy agenda, in particular with regards to cloud.
A key challenge for the Germans will be developing “GAIA-X” in this mold. Hailed by Peter Altmaier, Germany’s Federal Minister for Economic Affairs and Energy, as “the most ambitious digital project ever initiated by the German government,” the Franco-German cloud initiative is not infrastructure per se, but rather a repository of existing services.
This cloud club, where membership is based on EU rules and values—trust, transparency, interoperability—is designed to act as a counter-weight to free-market hyper-scalers to the west and state-backed competition to the east, and a means by which European data can be controlled by Europeans.
Currently, 11 German and 11 French cloud and industry players boast membership of GAIA-X. Third country companies are not barred from joining, but recently seen by-laws show they will be rule-takers rather than rule-makers. Other EU Member States are also invited to join, but these by-laws also give some preferential treatment to Germany and France, on top of their hefty political influence.
This poses institutional challenges for Germany in gathering consensus and carving a path forward on technological sovereignty during its Presidency.
They must persuade Member States that GAIA-X is the right vehicle for European sovereignty, albeit with, for now, the Germans and French in the driving seat. Can their Presidency effectively balance sovereignty with potentially curbing American innovation or restricting Chinese access to the EU cloud market?
Germany must also work with the European Commission, representatives from which have said initiatives from other Member States should also form part of the European cloud federation as not to compete with or duplicate efforts, to foster synergies and define a common European approach. GAIA-X’s “Policy Rules”, for example, could potentially feed into the European Commission’s “cloud rulebook,” and its repository into its “cloud marketplace,” both planned for 2022.
On 9 September, the European Commission presented to Member State representatives a draft cloud declaration on European cloud federation. Germany hope for this to be signed at the meeting of telecoms ministers in Baden Baden on 15 October.
The German Council Presidency’s slogan is “Europa wieder stark machen” (make Europe strong again). While digital hasn’t always been Europe’s strength, if German leadership can foster solidarity it may help Europe achieve its sovereignty.