This piece is authored by Bruno Liebhaberg, Founder and Executive Chairman
The past week captured a striking contrast in Europe’s digital agenda. In Brussels, the European Commission unveiled its Digital Omnibus, a deregulatory or “simplification” package pitched as a contribution to boosting the EU’s competitiveness. At the same time in Berlin, France and Germany hosted a Summit on Digital Sovereignty—an event explicitly focused on Europe’s long-term technological autonomy and strategic strength.
These two initiatives reflect two different priorities: a lightening of regulation on one side, strategic statecraft on the other. The risk is that the former steals political attention from what truly matters. Tweaking digital rules will do little to promote the EU’s competitiveness or its sovereignty.
A more streamlined rulebook helps – But it is not a strategy
The Digital Omnibus aims to merge, repeal, or modify parts of the GDPR, Data Governance Act, Data Act, the Open Data Directive, and elements of the AI Act. Several revisions are sensible – especially consolidating data regulations, simplifying compliance for SMEs and small mid-caps, and centralising oversight of certain AI systems within the Commission’s AI Office – even if their economic impact will likely be limited.
But good law-making must be careful, predictable, and evidence-led. The Commission’s proposal, however, is not backed by any impact assessment. This poses risks because investors’ confidence and the values underpinning Europe’s digital economy depend on a clear, stable regulatory environment that is revised solely on the basis of careful consultation and analysis.
Moreover, some of the proposed changes related to privacy and data processing – e.g., GDPR amendments enabling broader AI training uses – risk eroding trust in the EU’s digital framework, while trust is one of Europe’s actual competitive assets.
In the meantime, debates over the Omnibus package risk distracting political attention from what really matters, i.e. competitiveness.
Digital sovereignty requires comprehensive reforms – Not just deregulation
The Berlin summit highlighted the core issue: Europe aims not only to adopt digital technologies but to develop them domestically, a goal that requires difficult prioritisation.
This involves increasing access to deep and patient venture capital by mobilising the EU’s vast household savings and pension assets to support innovative firms. It requires regulation and procurement practices to give local companies a fair opportunity to compete and grow. It also demands securing competitive and predictable energy prices. Europe must remove remaining barriers within the Single Market so European innovators can scale rapidly. Finally, the EU needs an industrial strategy that stops spreading funds thinly across 27 Member States, replicating foreign incumbents, protecting legacy players. Instead it needs a strategy with strategic focus, which stimulates breakthrough innovation through the promotion of competition, sensible risk tolerance and a focus on genuinely disruptive technologies.
Regulatory simplification alone will not address any of these issues or make up for Europe’s structural weaknesses. Strategic autonomy requires strategic investment and reforms.
Focus where Europe can lead – Not where it cannot catch up
Technology markets are characterised by regional specialisation, and sovereignty does not mean doing everything domestically; it means building sufficient strengths across a range of high-tech activities so that Europe’s dependencies are not one-sided. The technologies Europe can realistically develop will therefore reflect both its strategic vulnerabilities and its existing capabilities.
In practice, the continent still holds genuine advantages in several areas, including digital health and med-tech applications, quantum computing, industrial automation and robotics, trust-based and human-centric AI, and emerging approaches to intelligence such as neurosymbolic, embodied and world-model techniques.
The last point may prove decisive. LLM-driven AI frenzy is likely to soon reach its limits. The next revolution – toward human-level intelligence – may rely less on scaling up statistical models and more on cognitive architectures where European scientists and companies already excel. Europe has world-leading research capacity in these areas, but risks losing it without coordinated public investment and demand. Designing a strategy and regulatory environment around LLMs poses a risk of tying Europe’s future to just one technological paradigm.
So is the Digital Omnibus strategically important? – Not really.
The Digital Omnibus fixes irritants in the digital rulebook. It reduces friction. It trims administrative burdens. And some of its technical adjustments are worthwhile.
But it does not solve the structural problems that truly hinder Europe’s digital future.
Europe does not lose global tech races because its regulations are too complex and intrusive on small tech. It loses because it does not invest enough, scale or coordinate enough and ultimately, build enough.
Digital sovereignty demands an industrial policy that is focused on encouraging tomorrow’s disruptors instead of dispersing funds ‘fairly’ between Member-States and protecting today’s leaders. It requires a strategic focus on emerging fields where Europe can lead. It also requires a balanced procurement policy that transforms public budgets into engines of technological autonomy.
Simplification may be helpful, but it is not what will decide Europe’s digital future.
If competitiveness through sovereignty is the destination, the Digital Omnibus is not the vehicle: smart, comprehensive and strategic reforms and investment are.
