Digital Sovereignty Is About Power, Not Self-Sufficiency
IEP ANNUAL EVENT - Europe’s digital sovereignty will depend on its ability to organise its economic and technological leverage and pool it with like-minded partners. A commentary by Alberto Alemanno
IEP Bocconi Annual Event
On 18 November in Milan, Alberto Alemanno, Jean Monnet Professor of European Union Law at HEC Paris, will moderate the panel “Technology and Industrial Policy: The Race for Digital Sovereignty” at the IEP Bocconi Annual Event.
He will be joined by Marco Buti, Tommaso Padoa-Schioppa Chair at the European University Institute; Luca De Angelis, CEO of Tech Europe Foundation; and Reinhilde Veugelers, Professor of Economics at KU Leuven and Senior Fellow at Bruegel. In this commentary, Alemanno sets out the choices Europe faces in managing its technological dependencies and building leverage with partners.
Europeans are, by most measures, among the freest people in the world. They cross borders without papers, speak without censorship and vote governments out of office.
Yet they are only beginning to realise that their ability to exercise these freedoms rests on dependencies accumulated over decades, dependencies that can now be weaponised against them, individually and collectively.
This vulnerability is embedded in daily life. American providers control around 70% of Europe’s cloud market; European providers hold just 15%.
In 2025, 13 of the 20 countries then in the euro area relied entirely on international schemes for card payments, principally Visa and Mastercard.
The frontier AI models Europeans use are largely developed and hosted elsewhere, while critical minerals and key parts of the semiconductor supply chain depend heavily on China.
Infrastructure as Leverage
A digital kill switch, the sudden loss of access to essential services, is no longer hypothetical. Under US sanctions, judges and prosecutors of the International Criminal Court have lost bank cards and digital accounts, and the Court is replacing Microsoft Office with a European open-source suite.
When Washington sanctioned UN Special Rapporteur Francesca Albanese in July 2025, Italy’s Banca Etica refused her an account, though Italian law did not require it to, fearing secondary sanctions that could jeopardise its operations and its nearly 100,000 members and customers.
These are not collateral effects of foreign policy, but they are the latest manifestation of foreign policy. Control over essential infrastructure, increasingly concentrated in a handful of private companies, becomes political leverage that reaches individuals and institutions far beyond the sanctioning state. Today the targets are international judges and a UN expert. Tomorrow they could be a ministry, a hospital network or an entire country.
Europe is beginning to draw the lesson. As Marco Buti, Giancarlo Corsetti and Anna Peychev argue, the EU long operated under a “reduced-responsibility model”, relying on American security, the American market and a US-centred financial system while postponing its own common capabilities. That model is no longer tenable.
The Chips Act and other European industrial initiatives reflect a growing recognition that market size and regulatory authority are not enough without the capacity to build and control critical infrastructure.
Yet Europe remains divided on how to get there. The Commission’s Digital Omnibus, which reopens parts of the digital rulebook including the AI Act, captures the tension.
Simplification may be necessary, but deregulation is no substitute for building capacity, just as regulating foreign providers cannot make Europe independent of them.
Three Routes to Digital Sovereignty
Three approaches are available.
The first, self-sufficiency, is neither feasible nor desirable: no bloc, however large, can reproduce the entire stack, from advanced chips and cloud to AI models and critical minerals.
The second is to identify and develop strategic chokepoints, and Europe has more of them than it realises. ASML’s lithography machines are the obvious example.
But a February 2026 study by the Jacques Delors Institute identifies 41 products for which China relies on the EU for more than 80% of its imports, from medical technologies to specialised machinery, and 67 such products for the United States. Europe holds leverage it has barely recognised, let alone organised.
The third is to build coalitions that shape the rules governing critical technologies, not by exporting EU regulation (the Brussels Effect is a tale Europeans have fallen in love with, but which has delivered far less than promised), but by jointly developing standards for AI and data, safeguards against politically motivated service disruptions, coordinated procurement and interoperable infrastructure.
These approaches reinforce one another. Strategic assets to be built over time give Europe bargaining power; common rules govern how that power is used; and partners extend its reach.
Europe’s real constraint, then, is not a lack of power but its national leaders’ difficulty in exercising it collectively.
Its research, industry and market remain dispersed across national strategies, and its governments too often negotiate, invest and respond to pressure separately.
Meanwhile its greatest strength, the capacity to set rules to protect the people, the market and the planet, risks being traded away in the name of competitiveness rather than matched with the industrial capacity that would give those rules weight.
Pooling Power with Partners
The answer is to pool power with partners. Mark Carney’s call at Davos for middle powers to cooperate rather than accept terms set by great powers offers the starting point; Ursula von der Leyen’s September invitation to Canada to become the EU’s first associate member is the first attempt to give it institutional form.
Building on CETA, Horizon Europe and the SAFE defence instrument, such an association could let Europe and willing partners coordinate investment and develop common positions on cloud, AI, critical minerals and secure payments, without adopting the EU acquis. Japan, the UK or Norway could join specific initiatives.
This would update the Monnet method: start not from an abstract vision of union, but from concrete problems no country can solve alone.
The obstacles are considerable. Governments guard their champions and fiscal prerogatives, politics is fragmenting, and the legal form and accountability of an association with Canada remain open questions. These are reasons to design it carefully, not to abandon it.
Digital sovereignty does not mean sealing Europe off from the world. It means the capacity to choose its dependencies, shape the terms on which they operate and act with partners when those terms are threatened. That is the power to remain free in an interdependent world.
IEP Bocconi does not express opinions of its own. The opinions expressed in this publication are those of the authors. Any errors or omissions are the responsibility of the authors.
