EuroStack – A European Alternative for Digital Sovereignty

More than 80% of Europe’s digital technologies and infrastructures are imported, and 70% of the foundational AI models used globally originate in the United States. Meanwhile, European companies account for just 7% of global research spending on software and the internet. These figures alone highlight Europe's heavy reliance on other economic powers in the digital sector. The EuroStack initiative aims to change that, serving as a cornerstone of the European Union’s push for digital sovereignty and self-determination.

Backed by a cross-party coalition in the European Parliament, the EuroStack initiative emerged from a parliamentary event in September 2024 and brings together leading companies, academics, policymakers and civil society. Beyond reducing technological dependence, the initiative seeks to boost industry competitiveness, drive innovation, build resilient sovereign infrastructures, expand mutual networks and harness digital technologies for the common good. A key element of the framework is its commitment to democratic values, social norms and the EU's sustainability goals.

“We have seen how vulnerable European states and economies are when ideological interests ally with technological and economic power in other parts of the world. To maintain its place, Europe must actively shape digitization instead of chasing trends that emerge elsewhere. It's time for Europeans to take control of their digital future,” says Martin Hullin, director of the Bertelsmann Stiftung’s Digitalization and the Common Good program. 

At the core of the EuroStack initiative are cutting-edge technologies that influence each other, including semiconductors, networks and satellites, software, cloud computing, quantum technology, the Internet of Things and – most critically – data and AI. To remain competitive, Europe must strengthen its own capabilities while expanding development and production capacity in these strategic areas. This approach aims to deliver common services for all EU citizens, such as federated data spaces, an EU-wide digital ID and the digital euro. The framework also establishes guiding principles for digital applications: from interoperability and decentralized structures to sustainability and cyber security, inclusive access and the promotion of democratic values.

The EuroStack approach calls for a fundamental policy shift toward deeper integration – much like the introduction of the euro, which required transnational structures and processes. It envisions an EU-wide digital infrastructure built on common platforms, data spaces, standards and coordinated strategies and investments. Governments and businesses would adopt  a “Europe first” approach, potentially through a Buy European Act that prioritizes European-made digital products over national interests and foreign alternatives. The result would be a fully integrated digital ecosystem for interoperable services – paving the way for the next stage of the European single market.

The EuroStack report estimates that developing this digital ecosystem will take roughly a decade, making it essential to launch the initiative without delay. Decisive action and substantial early investment will be crucial. Experts project that EuroStack will require around €300 billion by 2035. As a first step, €10 billion should be channeled into a European technology fund. This fund would boost the financing of innovative and scalable digital products “made in Europe” across sectors such as robotics, biotechnology and public services. Funding decisions could be determined through an EU-wide innovation competition, the “EuroStack Challenge.”

The report also outlines a series of industrial policy instruments tailored to key technology sectors. These include nationwide 5G expansion, targeted investment in AI, quantum and cloud technologies as well as the provision of shared data and accessible digital infrastructures – offering an alternative to the closed systems dominant outside Europe.

“The measures needed to implement ‘EuroStack’ are ambitious and complex, but they are also urgent”, says Francesca Bria, innovation economist, digital policy expert and lead author of the report. “Europe's sovereignty requires a technology leap. We are currently importing technologies that undermine our autonomy and our values. The EuroStack is our ‘moonshot’ moment, the digital evolution of the euro and the single market. Combined with a European Sovereign Tech Fund to attract talent and scale indigenous chips, sovereign AI clouds, and decentralized open-source products, it is a strategic necessity. This is how Europe will innovate and lead on its own.”

Commissioned by the Bertelsmann Stiftung, the EuroStack report was prepared by a team of authors led by Dr. Francesca Bria. The report is supported by a partner consortium that includes the Mercator Foundation, the European think tank Centre for European Policy Studies (CEPS) and the London-based UCL Institute for Innovation and Public Purpose, in collaboration with the Bertelsmann Stiftung.