Is Europe in danger of losing its sovereignty?

It used to be that a country's sovereignty – its ability to do what it wants at home and abroad – depended mostly on military or economic clout. But in the digital age, when the ability to make sense of massive amounts of data will increasingly determine economic and military might, that's changing.


For the EU in particular, that's a problem: The world's largest economic bloc doesn't have anything comparable to Silicon Valley, whose massive digital companies lord over the data of billions of people and are poised to lead the next wave of digital innovation. Meanwhile, its companies in the US and East Asia make much of the physical hardware, like semiconductors, that powers the digital economy. Long-term, there's a risk that Europe could be cut off from key technologies in a crisis or end up overly dependent on tech companies in countries that might not always share Brussels' values on privacy and human rights.

Ursula von der Leyen, the incoming president of the European Commission, wants that to change. She's making a big push for "technological sovereignty" during her upcoming 5-year term. How?

First, by saying "no" to foreign tech giants that want access to Europe's lucrative market of 400-million consumers without respecting privacy rights. Brussels has had some success here: its strict data protection laws have already forced some of the world's biggest websites to conform their data practices to EU laws.

But being a regulatory superpower isn't enough. Europe also needs to ensure that its companies can compete in the digital age. Consider Europe's vitally important car industry, where the increasingly complex software that makes vehicles run will soon be more valuable than the rest of the car's parts combined. If one of Europe's most vital industries ends up beholden to foreign tech companies, its technological sovereignty will be in question.

Still, shoring up tech sovereignty won't be easy. The US and China aren't going to look kindly on attempts to rein in Silicon Valley. The US has already threatened tariffs in response to France's move to slap a tax on big digital firms, arguing that Paris unfairly singled out US tech companies. Uncle Sam isn't going to take other aggressive regulation from Brussels lying down. And trying to shut out Chinese 5G suppliers in order to give European manufacturers a leg up might stoke anger in Beijing.

What's more, the EU is actually 28 (ok, soon 27) countries who themselves don't all agree on questions about privacy regulation or how best to foster European technology champions. When Brussels comes asking them to change their views, they may refuse, citing their own...sovereignty.

Amid the current need to continually focus on the COVID-19 crisis, it is understandably hard to address other important issues. But, on March 31st, Washington Governor Jay Inslee signed landmark facial recognition legislation that the state legislature passed on March 12, less than three weeks, but seemingly an era, ago. Nonetheless, it's worth taking a moment to reflect on the importance of this step. This legislation represents a significant breakthrough – the first time a state or nation has passed a new law devoted exclusively to putting guardrails in place for the use of facial recognition technology.

For more on Washington's privacy legislation, visit Microsoft On The Issues.

Read our roundup of COVID-19 themes and stories from around the globe.

Europe skirts US sanctions to help Iran: While the US insists on tightening the sanctions noose around COVID-stricken Iran, European countries are now sending medical equipment. To do so, they are using for the first time a system called INSTEX, a back-channel financial mechanism created a year ago that allows Europe to maintain trade ties with Iran despite US sanctions. Recall that in 2018 the US pulled out of the multilateral Iran nuclear agreement and reimposed crippling sanctions – the Europeans stayed in the deal and have tried to salvage it. To date, Iran has suffered more than 3,000 deaths from COVID-19, one of the highest tolls in the world. Some say that Iran's failure to contain the contagion has been complicated further by US sanctions, which have thwarted the Islamic Republic's ability to fund medical imports. Tehran has urged the US to ease sanctions to no avail, but Ayatollah Khamenei has also, citing some wild conspiracy theories about the coronavirus' origin, refused medical aid from Washington.

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Over the past decade or so, the European Union has weathered the global financial crisis, a migrant crisis, and the rise of populist nationalism. Sure, it's taken its fair share of bumps and bruises along the way, but the idea of a largely borderless Europe united by common democratic values has survived more or less intact.

Then came the coronavirus. The global pandemic, in which Europe is now one of the two main epicentres, is a still-spiralling nightmare that could make those previous crises look benign by comparison. Here are a few different ways that COVID-19 is severely testing the 27-member bloc:

The economic crisis: Lockdowns intended to stop the virus' spread have brought economic activity to a screeching halt, and national governments are going to need to spend a lot of money to offset the impact. But some EU members can borrow those funds more easily than others. Huge debt loads and deficits in southern European countries like Italy and Spain, which have been hardest hit by the outbreak so far, make it costlier for them to borrow than more fiscally conservative Germany and other northern member states. In the aftermath of the global financial crisis, this imbalance nearly led the bloc's common currency, the Euro, to unravel.

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