Europe wants to develop its economic sovereignty: Is this credible?

After the COVID crisis, Europe wants to develop its economic sovereignty in strategic areas: healthcare and medicine, telecom equipment, internet platforms , equipment for renewable energies and electricity storage, artificial intelligence and connected objects, robots, big data, etc . Is this possible to achieve? Some developments are positive: Europe wants to protect itself against abnormal competition from certain Chinese companies, which are protected in their domestic market, subsidised, and have access to abnormally cheap funding; Europe wants to introduce a compensatory mechanism at its borders linked to CO 2 emissions from countries that export to Europe; Europe has a massive savings surplus that can be borrowed to finance public (national and EU recovery plans) or private investments. The euro zone can rely on an international currency, the euro, for its financing. In other words, independent monetary policy is guaranteed within this area, which is an important pillar of economic sovereignty . But on the negative side , European companies are seeking to restore their profitability and therefore to expand in countries with low production costs. While this may include Central European countries, it may also include non-European emerging countries. Also on the negative side, the return on savings invested in risk-free bonds in Europe is extremely low, which may encourage investors/savers to lend to the rest of the world to obtain higher returns. Lastly, we should not forget the presence of increasing returns to scale, especially in new industries such as telecom technologies as well as internet platforms. This gives an advantage to existing large companies at the EU’s disadvantage. All things considered , the pandemic seems to have awaken ed Europe to the reality of being increasingly squeezed by the two hegemons, namely the U nited S tates and China. Europe is a big enough economic block to afford a credible pursuit of increased economic sovereignty, but important roadblocks still remain, mainly related to the very gloomy growth prospects for the region as well as a still fragmented economic and political reality.