Fact of the Week: Pursuing Digital Sovereignty Could Cost Europe an Estimated $4.2T Over 10 Years

Source: Nicklas Lundblad, “Digital Sovereignty: Can Europe Afford It?” (Center for European Policy Analysis, October 29, 2025).

Commentary: In response to unpredictable U.S. foreign policy and China's continuing unfair trade practices, some in the European Union (EU) are calling for an “independence moment.” Indeed, digital sovereignty—or complete technological independence—has become a priority for the European Commission. However, digital sovereignty would be prohibitively expensive, if not impossible to wholly achieve for the EU. According to the Center for European Policy Analysis, considering the cost of semiconductor fabrication facilities, software and hardware, the development of digital services, the recruitment and retention of a skilled workforce, and the opportunity costs of this operation, digital sovereignty would conservatively cost the EU €3.6 trillion ($4.2 trillion) over 10 years. In other words, digital sovereignty would cost the EU 20 percent of its annual GDP over the next decade. Rather than pursuing complete digital sovereignty, Europe should aim to reduce dependencies on mercantilist nations like China and instead forge stronger technological partnerships with allied nations. And, moreover, policymakers should focus on European digital capabilities and competencies instead of digital sovereignty.