EUROPE'S DIGITAL FUTURE: PERSPECTIVES FROM NORTHERN EUROPE - Europe's Digital Future - IIEA
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Europe’s
Digital Future
EUROPE’S DIGITAL FUTURE:
PERSPECTIVES FROM
NORTHERN EUROPE
Contents
Introduction ........................................................................................ 4
Denmark .............................................................................................. 5
Estonia ................................................................................................... 13
Ireland ................................................................................................... 20
Netherlands ........................................................................................ 31
Sweden ................................................................................................ 40
3Introduction digital sovereignty; to identify key issues or
interests in the debate that are particularly
relevant for each Member State; and to offer an
The concept of ‘digital sovereignty’ has initial assessment of the possible implications
emerged as a prominent new theme in of a digitally sovereign EU.
European digital policy, and is one which may
have important implications for the future of First, Jan Høst Schmidt of Think Tank Europa
the EU and its Member States. outlines Denmark’s view of the topic. He notes
his country’s more sceptical view of the concept
The full scope and detail of the concept remain of European digital sovereignty, but identifies
poorly defined, but European Commission important European digital policy priorities
President Ursula von der Leyen has written that which Denmark supports. Dr Adrian Venables
digital sovereignty “describes the capability of the Tallinn University of Technology (TalTech)
that Europe must have to make its own highlights the positive contribution Estonia
choices, based on its own values, respecting may be able to make to the development of
its own rules.” The European Commission’s European digital sovereignty by drawing on
2030 Digital Compass: the European way for the Estonia’s experience as a leader in digitalisation.
Digital Decade sought to flesh out the concept Séamus Allen of the Institute of International
further, outlining the need to develop policies and European Affairs (IIEA) in Ireland describes
and technological capabilities that empower it how European digital sovereignty may have
to achieve a “sustainable and more prosperous implications for many of Ireland’s key interests,
digital future” while addressing Europe’s digital although to date the concept itself has received
“strategic weaknesses, vulnerabilities and little attention in Ireland’s public discourse. Brigitte
high-risk dependencies.” Dekker of the Clingendael Institute presents
the prominent discussion on digital sovereignty
While it is clear that the issue of digital taking place in the Netherlands and outlines
sovereignty is one that could have far-reaching how the Netherlands is playing an active role in
consequences for the EU, to date it has shaping Europe’s digital policies. Finally, Gunnar
engendered only limited debate at national Hökmark, of the Stockholm Free World Forum,
level in many EU Member States. As such, in provides a perspective from Sweden, noting his
early 2021, the Institute of International and country’s preference for a Europe that is open
European Affairs (IIEA) launched the Europe’s and competitive, and which does not close itself
Digital Future project, which is supported by off from an increasingly digitalised world.
Google, to explore what the concept of digital
sovereignty means, and what future it might In a world in which digital technology plays
herald for the EU and for Europe’s small, open an increasingly vital role across all aspects
economies, in particular. of society, the direction in which European
digital policy develops will have significant
In pursuit of this goal, the IIEA has convened implications for Europe’s prosperity and
a transnational network of institutions, initially society. The emerging nature of European
comprised of think tanks and universities, digital sovereignty and the role this concept
from Denmark, Estonia, the Netherlands and will play in shaping Europe’s digital policy
Sweden, in addition to Ireland. may thus have great importance for Europe’s
future and for the role of Europe in the world.
This is the first joint report published by this This report is intended to provide a framework
network1. It seeks to highlight the perspectives to promote further discussion, debate and
of some of Europe’s ‘digital frontrunner’ states. research on this vital subject.
This report consists of short papers outlining
the national perspectives of each participating The IIEA would like to express its gratitude to
Member State. These short papers seek to the participating authors and their respective
assess whether and to what extent these organisations for their work on this report, and
Member States have national debates or for their ongoing participation in this project.
strategies on the topics that are related to
As an independent forum, the IIEA does not express opinions of its own. The views presented in this report
are those of the authors alone.
4DENMARK
The limited Danish debate on EU Digital
Sovereignty reveals clear scepticism
about the concept of digital sovereignty.
Jan Høst Schmidt, Think Tank Europa
5Introduction its strategic weaknesses in digitalisation, but to
avoid a protectionist approach.6
The concept of EU Digital Sovereignty was
In March 2021, the Danish Government launched
launched by European Commission President
a Commission on Digital Partnership with Danish
Ursula von der Leyen in her first State of the
business, social partners and experts to maintain
Union speech on 16 September 2020. Referring
Danish digital leadership and improve Danish
to Europe’s need for a digital transformation
businesses’ competitiveness. The mandate of
with emphasis on more data production and
the Partnership Commission has no reference to
protection, European production of Artificial
the concept of EU Digital Sovereignty, although
Intelligence (AI) and a strengthened digital
the Partnership Commission is asked to take
infrastructure in the EU, the President announced
account of international experiences in the
that “None of this is an end in itself - it is about
digital area and EU digital initiatives.7
Europe’s digital sovereignty, on a small and
large scale”.2
In June 2021, the Government launched a
debate on regulation of the tech-giants on the
The term ‘digital sovereignty’ is widely used in
basis of a White Paper. This White Paper calls
EU policy circles and refers to the EU’s ability
for more responsibility for the tech-giants on
to obtain a sense of independence from third-
data protection, more regulatory powers for
country providers of key technologies.3 But it is
the public authorities with respect to dominant
also an unclear concept.
positions of major platforms and a fairer tax
contribution from the tech-giants.8
To the Danish Government, for example, the
concept of digital sovereignty includes a risk of
Despite scepticism about the term “EU digital
protectionism and loss of innovative industrial
sovereignty”, the Government generally
capacity. In several exchanges with the Danish
supports the regulatory line in the proposed
Parliament on the German and Portuguese
Digital Services Act and Digital Markets Act as
Presidencies’ programmes on the Single
well as the proposal on AI.9
Market and digitalisation, the Government has
supported a strengthening of the EU’s capacity
to develop new digital technology and to Denmark is
ensure that the Digital Single Market operates
on European values and rules. But the Danish
amongst the top
Government also expresses concern that such a performers with
strategy must not lead to a closed-off Internal
Market.4 In addition it should be noted that the respect to digital
use of the term ‘sovereignty’ in an EU-context
is in itself sensitive in Denmark, where research
transformation
has documented the prevalence of a strong According to the European Commission
public perception of EU-integration leading to scoreboard on digital performance, Denmark
the erosion of national sovereignty.5 ranks amongst the four best performing EU-
countries, with Finland, Luxembourg and
The Danish Prime Minister together with the Netherlands, and on top of the global list over
political leaders of Germany, Estonia and Finland the period 2015-18, cf. Figure 1.10
co-signed a letter to Ursula von der Leyen ahead
of the European Council on digitalisation in the
EU, which took place ahead of the March EU
Summit. In the letter, the four Prime Ministers call
for the EU to build on its strengths and reduce
6Figure 1. Digital performance 2015-18 of EU Top 4 against the rest of the world, according to the
European Commission’s overall scoreboard for digital performance
Note: Denmark is in the EU top 4 category every year of the period and with the highest 4-year average together with
Finland cf. International DESI 2020 final study report, Annex 3 table 6.
Source: International Digital Economy and Society Index 2020, European Commission 2020 - https://digital-strategy.
ec.europa.eu/en/policies/desi
ICT plays an increasing role for Danes population between the ages of 16 and 74
according to a study based upon a survey years who use social networking services such
conducted by The Danish Statistical Office.11 as Facebook or Instagram.
According to the 2020 report, 3.8 million Danes In 2014, all communication with public
were e-shoppers in 2019, corresponding to authorities was made digital with exceptions
approximately 80% of the population between for elderly people and people with special
16-89 years. Compared to 2011, there were disabilities. In 2019, 90% of Danes used the
900,000 more e-shoppers in 2019. The share obligatory public mailbox for communications
of e-shoppers has increased especially in the with the public authorities, while 9% were
elderly population, where it has tripled since exempted. To the question ‘To what extent do
2011. you trust public authorities to take good care
of your personal information?’ most people
At 23%, Denmark is the EU country with the responded ‘high’ or ‘to some extent’ (27% and
highest proportion of citizens who have used 49%, respectively). 23% have lesser or no trust
‘smart home’ products, and at 81% is the EU that the public authorities take good care of
country with the largest proportion of the their personal information.12
7Key issues in the plan to deliver input to the Digital Partnership
Commission.16
Danish debate
on digital As part of the Danish digital transformation
process, the Danish Recovery and Resilience
transformation Plan (RRF-plan) reserves spending of €0.4
billion for digitalisation projects, mostly in the
The debate in Denmark to a large extent public sector, corresponding to 25% of the plan.
focuses on how to further improve the national €0.2 bn is for a project to establish a digitalised
digital capacity of public and private sectors, carbon emissions tax in Denmark as part of
including how to secure high-speed fiber and its ambition to reach 70% CO2-reduction in
5G in all parts of Denmark, how to improve 2030. The Recovery and Resilience Plan in
the digital skills of the Danish population addition supports the digital transition through
and how to secure continued trust in digital investments in strengthened connectivity and
solutions and in the use of data, including how increased digital export opportunities for SMEs
to regulate the tech-giants. plus an upgrade of digitalisation in the health
care sector.17
The Government’s mandate to the Commission
for Digital Partnerships covers five broad areas: On top of EU-funds for investments in spreading
The future digital public sector; the future of ultra-fast fiber to remote areas of Denmark,
digital businesses and workplaces; a better the Government has agreed with the main
public-private partnership and innovation; telecom companies operating in Denmark to
a data-driven society; and Denmark in the secure a roll out of 5G to 75%. of the Danish
future.13 These broad areas are to a large extent population by 2025. This agreement has been
comparable to the four areas outlined by the reached in the context of the auctioning out of
European Commission in its Communication frequency allowances for the 3.5 GHz-band to
“2030 Digital Compass: The European Way for the companies.18
the Digital Decade”.14
Irrespective of its concern about the term
According to its mandate, the Danish “EU Digital Sovereignty”, the Government
Commission shall take account of ongoing recognises the need, in certain cases, for
work on a digital strategy for the entire public support to strengthen critical technologies with
sector, for relations between the public and identified high risk dependencies. But in such
private sectors, on a national strategy for a case the identification of those technologies
cyber- and information security and on a should take place on the basis of a transparent
strategy for better coverage of remote areas analysis with clear identified criteria.19
of Denmark.15
The Government has, in exchanges with the
The Association of Danish Industries, DI, Danish Parliament in May 2021, announced that
that will be a key player in the work of the it will work for an EU regulation of platforms,
Partnership Commission, has presented 46 which in accordance with the general thrust of
proposals to improve digital transformation in the Commission’s proposals, will have clear and
Denmark. The DI’s plan to a large extent focuses simple rules for platforms’ responsibility with
on simpler regulation through digitalisation of respect to illegal content. For AI, the framework
the regulation, securing better competences in should take account of the risks associated
digital skills in the workforce plus support to with the use of the technology, but also make
Danish SMEs to develop smart digital solutions it easier to innovate in this area and scale up
and use new technologies such as AI. The DI cross-border wise. Finally, the Government
plans to launch a large debate amongst Danish supports new instruments to limit the market
businesses to discuss the individual parts of its power of mega-platforms to ensure that they
8do not prohibit other platforms from entering
the market. In this context the Government is
Key elements for
open for suggestions to target regulation of a better digital
mega-platforms, for example, by preventing
them from promoting their own services at the transformation of
expense of other services.20 the EU and Denmark
This line on the regulation of the platforms is From a Danish perspective, to have positive
repeated in the Government’s White Paper implications, the EU strategy on digital
on the better regulation of the tech-giants. transformation would have to focus on a
The paper launches nine principles for number of elements, some of which are already
debate, including more transparency on the part of the Commission’s strategy for an EU
platforms’ business models and algorithms, digital compass, some of which have been
more responsibility from the firms concerning developed by independent analysts, including
content on the platforms, clearer limits on the Think Tank Europa27. First of all, EU businesses
platforms’ dominant positions and a better would have to cooperate and compete with
contribution of the tech-giants via taxation.21 global industries to be innovative. Direct
support for development of technologies such
The DI advocates that Denmark should take as AI would have to take place on the basis
an active part in the EU discussion on digital of clear and transparent criteria. More EU and
transformation, using best practice to make this national resources would have to be devoted
regulation fit much better for the digital age.22 to developing new technologies and standards
for these technologies.
Recently the President of the IT-workers’
Association, Prosa, criticised the GDPR for An ex-ante risk-based regulation of AI as
being too complicated, calling for a review proposed by the Commission may work if
of the policy. Prosa wants a system giving based on clear criteria and rules. Details of
each citizen the possibility to decide who, that regulation should preferably be discussed
for what and when the citizens’ data will be with global partners.
used, and that the use of data is prohibited
unless consent from the citizen has been Open and interoperable standards both off-line
given.23 So far this has not been taken up at and online should be the rule, and standards
the political level in Denmark. However, MEP should be developed in cooperation with
Karen Melchior (Renew Europe) has raised the important global partners. Besides technical
issue of continued reductions in the resources criteria, energy efficiency and sustainability
for the Danish Data Authority leading to a criteria will also have to be developed for a more
reduced capacity to act swiftly.24 green and sustainable European economy.
On an EU digital tax, the former Danish Liberal Regulation of platforms should ensure
Prime Minister, after having blocked the compliance with the rules of content and rules
proposal together with other Member States in ensuring a fair and high level of competition
November 2018, changed course and adopted among all platforms operating in the EU. To
a favorable position - if the tech-giants did this effect a special set of rules for mega-
not, on a voluntary basis, pay more taxes in platforms or gatekeepers, as proposed by the
Denmark and the EU.25 The present Social- Commission, would seem appropriate. But it
Democratic Government in its White Paper should not discriminate, and should be for all
seems to await the result of the negotiations mega-platforms including EU-based ones.
in the OECD, hoping for an international
solution after US-President Biden’s proposal of It will be important for the EU to have the
a minimum corporate tax of 21%.26 means to break-up big tech companies in
9case of abuse of dominant positions, but the
European Commission should allow tech and
telecommunication companies in the EU to
scale-up, especially via cross-border mergers,
in order to leave room for more private
investments in connectivity and innovation.
More EU resources, including more financial
support from the structural funds, and national
resources will also have to be allocated to
promote the faster roll-out of ultra-fast fiber
and 5G in the EU and to support digital
skills in the population. Following the Danish
experience, it might be envisaged that plans
could include targets with respect to the timing
and percentage of the population who will
benefit from the roll-out of 5G in connection
with contracts for licenses for radio spectrums.
Intra-EU cooperation of data centres should
be developed. The GDPR, which has been a
success, should nevertheless be reviewed to
improve clarification and reduce complexity.
To this effect the regulation should focus
less on individual consent and more on ex-
ante responsibility for data use and liability
for reasonably foreseeable harms for data
users. Collection of data like traffic data
and to a certain extent car data should be
allowed, whereas use of health data should be
prohibited unless explicit permission is given
by the individual citizen. Reference to sex, race
and religion should not be processed, unless
explicit consent has been given by the citizen.
The devil will be in the details of the proposals
which will be part of the strategy. In a Danish
context, it is at this stage clear that the term
EU digital sovereignty is not mobilising Danish
support. However, the elements highlighted
above will, if implemented in practice, lead to
big benefits for EU societies and for business
competitiveness.
10Endnotes
1. The first report of this project, European Sovereignty in the Digital Age, by Séamus Allen, IIEA, provides
an overview of the digital sovereignty debate to date, and can be downloaded here: https://www.
iiea.com/publications/european-sovereignty-in-the-digital-age
2. State of the Union 2020 Address by President Ursula von der Leyen, European Commission.
https://ec.europa.eu/info/strategy/strategic-planning/state-union-addresses/state-union-2020_en
3. EU ‘punching well below its weight’ in digital technologies, von der Leyen warns, EurActiv. https://www.
euractiv.com/section/digital/news/eu-punching-well-below-its-weight-in-digital-technologies-
von-der-leyen-warns/
4. Answer to Question No 2672021 at the request of the Business Committee, Folketingets Erhvervsudvalg,
https://www.ft.dk/samling/20201/almdel/eru/spm/267/svar/1738550/2322808/index.htm
5. Suveræne Danmark (2017), Think Tank EUROPA. http://thinkeuropa.dk/pdf/Rapport_Suveraene_
Danmark_final.pdf
6. Letter from the leaders of Denmark, Estonia, Germany and Finland to Commisison President von der
Leyen, published in Politico https://www.politico.eu/wp-content/uploads/2021/03/01/DE-DK-FI-EE-
Letter-to-COM-President-on-Digital-Sovereignty_final.pdf
7. Nyt digitaliseringspartnerskab skal bringe Danmark stærkere ind i fremtiden, Finansministeriet https://
www.regeringen.dk/nyheder/2021/nyt-digitaliseringspartnerskab-skal-bringe-danmark-og-
danske-virksomheder-ud-af-coronakrisen-og-staerkere-ind-i-fremtiden/
8. Mod et bedre samfund med tech-giganter, Regeringen https://em.dk/media/14217/hvidbog-
techgiganter.pdf
9. Samlenotat fra Erhvervsministeriets notat af 4.maj 2021. FT EEU. https://www.eu.dk/samling/20201/
raadsmoede/573064/bilag/3/2393210.pdf
10. International Digital Economy and Society Index 2020, European Commission. https://digital-
strategy.ec.europa.eu/en/policies/desi
11. The survey is based upon a harmonised EU questionnaire (ICT usage by individuals and in
households 2019), but the study additionally covers a range of specific national questions. See
IT-anvendelse i befolkningen, Danmarks Statistik, March 2020- https://www.dst.dk/Site/Dst/
Udgivelser/GetPubFile.aspx?id=29449&sid=itbef2019
12. Ibid.
13. Digitaliseringspartnerskab om Danmarks digitale fremtid https://fm.dk/media/18780/kommissorium-
for-digitaliseringspartnerskab-om-danmarks-digirale-fremtid_a.pdf
14. The Digital Compass, European Commission. https://digital-strategy.ec.europa.eu/en/policies/
digital-compass
1115. Ibid.
16. Digitalt partnerskab styrker kickstart efter coronakrise, DI. https://www.danskindustri.dk/di-business/
arkiv/nyheder/2021/3/di-digitalt-partnerskab-styrker-kickstart-efter-coronakrise/
17. Denmark’s Recovery and Resilience Plan – Accelerating the Green Transition. Government of Denmark
https://fm.dk/media/18771/denmarks-recovery-and-resilience-plan-accelerating-the-green-
transition_web.pdf
18. Danskerne får bedre dækning og hurtigere adgang til 5G. Government of Denmark. https://ens.dk/
presse/danskerne-faar-bedre-daekning-og-hurtigere-adgang-til-5g
19. Samlenotat fra Erhvervsministeriets notat af 4.maj 2021. FT EEU https://www.eu.dk/samling/20201/
raadsmoede/573064/bilag/3/2393210.pdf 20 Debat om tyske fmd i november 2020
20. Debat om tyske fmd i november 2020
21. Mod et bedre samfund med tech-giganter, Regeringen. https://em.dk/media/14217/hvidbog-
techgiganter.pdf
22. Digitalt partnerskab styrker kickstart efter coronakrise, DI. https://www.danskindustri.dk/di-business/
arkiv/nyheder/2021/3/di-digitalt-partnerskab-styrker-kickstart-efter-coronakrise/
23. GDPR er uforholdsmæssigt kompliceret, Niels Bertelsen, Prosa https://www.prosa.dk/artikel/gdpr-er-
uforholdsmaessigt-kompliceret/
24. Karen Melchior om GDPR: Datatilsynet er afgørende – men bliver igen og igen beskåret, Karen Melchior,
Altinget Digital. https://www.altinget.dk/digital/artikel/karen-melchior-om-gdpr-datatilsynet-er-
afgoerende-men-bliver-igen-og-igen-beskaaret
25. Statsminister Lars Løkke Rasmussens tale på Venstres EU-landemøde, Published in Venstre. https://
www.venstre.dk/nyheder/venstres-formand-statsminister-lars-loekke-rasmussens-tale-til-venstres-
eu-landsmoede-2019.
26. Mod et bedre samfund med tech-giganter, Regeringen https://em.dk/media/14217/hvidbog-
techgiganter.pdf
27. The Digital Compass, European Commission, https://digital-strategy.ec.europa.eu/en/policies/
digital-compass; and Disrupting Europe. From laggard to digital frontrunner, Think Tank Europa. http://
english.thinkeuropa.dk/node/213
12ESTONIA
An enthusiastic proponent of digital
sovereignty, which offers much to this
highly digitised nation.
Dr Adrian Venables, Tallinn University of Technology
13Key issues in and message individual pupils or entire classes.
This information is also accessible by parents
the Estonian who stay closely involved with their children’s
debate on digital progress. Due to this technology, Estonia was
able to quickly switch to remote learning
transformation during the COVID pandemic and as a result
fared better than many other countries.33 With
Since it achieved independence in 1991, Estonia a quarter of a century of digital innovation and
has arguably become best known for its rapid a culture that constantly seeks to improve and
digital transformation, which began with the modernise, Estonia is in a prime position to
‘Tiger Leap’ programme in 1996. Launched lead Europe’s path to digital sovereignty.
by President Lennart Meri, this connected
all schools to the Internet by the year 2000
and was combined with large government-
Estonia’s
backed investments in computer networks contribution to
and infrastructure.28 The culture of innovation
resulted in Estonia being hailed as the ‘world’s
Europe’s digital
most digital society’ by Wired magazine in sovereignty
2015.29 Estonia became known for technology-
based start-ups, with Skype, Taxify (now Bolt), With a society already well aware of the
and Transferwise becoming global brands. benefits of digitalisation, Estonia has
been quick to recognise and promote the
Although other countries have since caught up advantages of European digital sovereignty.
with Estonia in terms of digital transformation, From a national perspective, the country will
the country still ranks highly in the European benefit significantly from more Europe-wide
Commission’s Digital Economy and Society digital transactions. As a small nation of only
Index (DESI).30 Most notably, Estonia ranks 1.3 million situated on the north-eastern edge
first in the digitisation of public services with of Europe, Estonia is disadvantaged in several
over 99% of transactions with the government ways. Although space for manufacturing
authorities available online, 24 hours a day. industries is plentiful, geographically long
This is possible due to a national identification supply chains and limited personnel resources
card, which is paired with a digital signature provide unfavourable conditions when
that has the same legal status as a hand signed competing in traditional markets against other
written document. This enables Estonians to central European countries. With time and
pay taxes, vote, conduct banking transactions space constraints not an issue in the supply of
and access their health records online. The digital services, Estonia is in a prime position to
advantages of this system is acknowledged by exploit the opportunities presented by greater
the population, with 95% of taxes filed online European digital sovereignty.
using information stored in a pre-filled form.31
E-services are only unavailable for marriages, Keen to increase the progress towards what
divorces and real estate transactions, although has been termed a ‘digital single market’, in
as a result of COVID-19, there is an initiative March 2021, the Prime Minister of Estonia
to conduct some of the initial procedural joined Heads of State of Finland, Denmark and
elements remotely as well.32 Germany in writing a joint letter to the President
of the European Commission. Highlighting
The introduction to the digital society starts that Europe is falling behind its international
at school with web applications enabling competitors, the letter emphasised the
parents, teachers and students to collaborate advantages of greater digital transformation.
and organise information. Teachers enter Drawing parallels to the established norms in
grades, attendance information, homework the trade of physical goods between nations,
14the Prime Ministers emphasised the need competitors in this area. Although the DESI
for digital policies involving governments, report indicated that Estonia has more than
society, and the economy.34 With its co- 120 mobile subscriptions per 100 people, the
signatories, Estonia highlighted three key steps introduction of 5G technology is lagging. While
to strengthen the EU’s digital sovereignty. some European cities already have deployed
First is to identify the critical technologies the technology, Estonia’s 5G roadmap seeks to
and strategic sectors that will clarify the introduce the capability by 2023.38 The same
EU’s strengths and weaknesses in the digital is true to a certain extent in the introduction
environment. Secondly, the EU must strengthen of Gigabit internet speeds. Despite having
its approach to critical technologies and almost universal Internet access, Estonia’s
strategic sectors. This requires open markets low population density outside of the main
and supply chains to prevent dependencies cities has resulted in a reduced programme of
on single suppliers. Finally, the leaders noted network upgrades in the countryside. In 2020
the need for a monitoring system that should the country was only rated as 47th in the world
be permanent, repetitive, and based on social, in terms of fixed broadband speeds.39 This
scientific, and economic principles. This would factor may also explain the state of digital
encourage innovation and development in transformation of some of Estonia’s businesses.
order to ensure European sovereignty, security, The digital compass refers specifically to EU
and competitiveness in the development of companies using so called ‘cloud’ services as
digital technologies.35 well as Artificial Intelligence (AI) and the use
of ‘Big Data’. However, the DESI report noted
At the same time that the Estonian Prime a ‘relative weakness’ as regards connectivity
Minister signed the joint letter to Ursula von and the digitisation of Estonia’s businesses,
der Leyen, the EU itself presented a vision for hindered perhaps by the lack of high-speed
its digital transformation by 2030.36 Termed the services.40 The final component of the digital
‘digital compass’ due to its four components compass is the digitalisation of public services
(Skills, Government, Infrastructures and in which Estonia excels. In a June 2021 meeting
Business), the Tallinn government has been a of EU telecommunication ministers, the
strong supporter of its proposals as they already Estonian minister of entrepreneurship and IT
align with Estonia’s own digital ambitions. commented on the use of digital services across
The first aim of the EU’s vision is an increase Europe. He stated that the digital services of
in Information Communication Technology EU Member States must be made available
(ICT) specialists and to ensure that a minimum to all European citizens – a principle at the
of 80% of the population have basic digital heart of digital sovereignty.41 Significantly,
skills. Estonia has had a programme to attract he also emphasised that digitisation is not a
more young people into ICT running since goal in itself but creates practical solutions
2012. Termed the ‘ProgeTiger’, this programme and added value from which businesses and
aims to improve the technological literacy and citizens will benefit. Supporting this view, the
digital competencies of teachers and younger European Commission also introduced its
students. Courses available include robotics, own vision for the newly announced European
3D technology and programming with pre- Digital Identity. This will enable EU citizens in
schoolers learning the basics of coding.37 one country to access the same e-services that
Familiarity in all forms of ICT is encouraged, are available to other European nationals and
with increasing emphasis on cybersecurity a vice versa.
feature of more recent programmes.
Of particular relevance to Estonia’s
The second component of the digital compass contribution to Europe’s Digital Sovereignty
is having secure and sustainable digital programme is the European Commission’s
infrastructures. This is a particularly important recently presented framework for a trusted
issue for Estonia, which has fallen behind its and secure digital identity for all Europeans.
15This includes the provision of a digital wallet other as if they were members of the same
for Member States’ citizens and businesses. ecosystem. This enables easy and secure
This will enable the digital identification to cross-border data exchange between these
be linked to other forms of identification and networks and ecosystems.
facilitate the switch from paper documents to
digital ones. As the intention is for the digital Finally, no discussion of digital sovereignty
wallet to be built on existing digital identities can be complete without including another
issued by Member States, Estonia’s own ID unique Estonian contribution - that of the
cards and electronic ID solutions would not be Data Embassy. This is an extension of the
replaced. Instead, all states would be obliged government’s network infrastructure, but
to make their own compatible digital forms the server resources are located outside the
of identification available to their citizens. To country’s territorial boundary and is protected
assist with this aspect of digital sovereignty, at the highest accreditation level for data
Estonia has unique experience and capability facilities.44 In June 2017, the governments
in the form of the ‘X-tee’. This system is at the of Estonia and Luxembourg entered into a
heart of Estonia’s digital society and is based bilateral agreement in which Estonian data
on the premise that data is only stored once in and associated systems were to be stored
a single location at its point of creation. When in Luxembourg’s government-owned data
needed, other approved agencies can access centre.45 Luxembourg was chosen as the first
the data without having to download or create data embassy location because of its facilities
their own versions, which could then become and willingness to enter into what was then a
outdated if the original data changes. new concept in national security. By protecting
essential national data that is only available in
Estonia’s X-tee environment includes the full digital form, this initiative mitigates the risk of
range of public and government services loss due to natural disaster or cyber, terrorist, or
with each having its own information system military attack. As this is not an embassy in the
connected to the network. Currently there are traditional diplomatic sense, it is a completely
nearly 3000 different services that can be new concept under international law, but does
used by the X-tee and in 2020 over 1.5 billion take into account the Vienna Convention on
data requests were made.42 To ensure that Diplomatic Relations. This includes having the
all transactions are secure, outgoing data is same rights as physical embassies, such as
digitally signed and encrypted and incoming diplomatic immunity from interference. Based
data is authenticated and logged. As well on this model, a future component of Europe’s
as enabling citizen to readily access public digital sovereignty could be leveraging
services, it also provides a high level of trust in further bilateral relationships to increase the
the system. This is because all users are able community’s data resilience through the use of
to identify which agencies have accessed their data embassies.
personal data. Although the X-tee is currently
only used by a small number of countries, it
is an ideal system to support the EU’s wider
Conclusions
data sharing aspirations. This is due to its
Estonia was one of the first nations to embrace
compatibility with multiple types of information
digital transformation and the country has
systems, its ability to transmit large data sets,
reaped the economic and social benefits of
and its capability to perform searches across
the progress that has been made. Estonia’s
several information systems simultaneously.43
transformation was the result of both the
The X-tee software was designed to be
foresight of its leaders and a population willing
scaled up as new e-services and platforms
to accept the surrender of their personal data
become available, as multiple instances can
in return for improved public services. Europe’s
be federated. Members of federated systems
own digital sovereignty will need similar inspired
can publish and consume services with each
leadership, particularly as countries that are
16more reluctant to transform may require some
persuasion. Estonia is rightly proud of its digital
society and is keen to export its knowledge and
technology to the rest of the EU as part of its
programme of digital sovereignty. A digitally
sovereign EU will lay the framework for increased
economic growth, reduced bureaucracy and
a more convenient and secure form of data
exchange. A commonly recognised form of
digital identification will reduce cross-border
crime and illegal migration as well as improve
access to time sensitive services such as in
medical facilities.
A more connected Europe will bring potential
benefits to Estonia as a digital free market will
enable data driven services to be marketed
throughout the community. Thus, any initiative
to encourage and promote European digital
sovereignty is one that will be fully supported
by the Estonian Government. As a leading
digitised nation, Estonia can expect to
enhance its reputation as a digital nation by
providing advice and it will benefit from a wider
implementation of digital services. However,
for European digital sovereignty to be widely
accepted, it must be trusted by its citizens. This
requires confidence that personal data will
not be abused by official authorities and that
it cannot be accessed or interfered with by
unauthorised parties. As such, Europe’s digital
democracy cannot be rushed and should
be sufficiently funded in its implementation,
while security concerns must be foremost in
the considerations of its developers. A single
data breach, poor configuration incident or
successful cyber-attack by a state actor or
criminal group may cause an irrevocable
loss of trust. However, achieved properly, a
combination of the European Commission’s
policy directives, with Estonia’s experience and
technology, bodes well for the future digital
sovereignty of the EU.
17Endnotes
28. Global lessons from Estonia’s tech-savvy government, Mari Roonemaa, UNESCO, https://en.unesco.
org/courier/2017-april-june/global-lessons-estonia-s-tech-savvy-government
29. Concerned about Brexit? Why not become an e-resident of Estonia, Ben Hammersley, Wired, https://
www.wired.co.uk/article/estonia-e-resident
30. The Digital Economy and Society Index (DESI), European Commission, https://digital-strategy.
ec.europa.eu/en/policies/desi
31. Digital Estonia – Leading Digital Society in the World, Estonian Convention Bureau, https://www.ecb.
ee/destination/digital-estonia-leading-digital-society-in-the-world/
32. State wants to move marriages, divorces online, Roberta Vaino, ERR, https://news.err.ee/1608138256/
state-wants-to-move-marriages-divorces-online
33. Estonia offers an ideal example of Remote Learning, Abe Post-Hyatt, Veriff, https://www.veriff.com/
blog/estonia-can-teach-a-lesson-in-remote-learning
34. Estonia, EU countries propose faster ‘European digital sovereignty, Helen Wright, ERR, https://news.err.
ee/1608127618/estonia-eu-countries-propose-faster-european-digital-sovereignty
35. The Heads of Government of Germany, Denmark, Estonia and Finland: Europe’s digital sovereignty gives
us the ability to determine our own future, Estonia Government Communications Office, https://valitsus.
ee/uudised/saksamaa-taani-eesti-ja-soome-valitsusjuhid-euroopa-digitaalne-suveraansus-
tagab-meile
36. Europe’s Digital Decade: digital targets for 2030, European Commission, https://ec.europa.eu/info/
strategy/priorities-2019-2024/europe-fit-digital-age/europes-digital-decade-digital-targets-2030_
en
37. ProgeTiger – Estonian way to create interest in technology, Education Estonia, https://www.
educationestonia.org/progetiger/
38. Eesti 5 g Teekaart, Estonian Ministry of Economic Affairs and Communications, https://www.mkm.
ee/sites/default/files/eesti_5g_teekaart.pdf
39. E-state Estonia has some of the slowest internets in Europe, Sten Hankewitz, Estonian World, https://
estonianworld.com/technology/index-e-state-estonia-has-some-of-the-slowest-internets-in-
europe/
40. The Digital Economy and Society Index (DESI), European Commission, https://digital-strategy.
ec.europa.eu/en/policies/desi p.14
41. Estonian minister: Digital services must be made available to all EU citizens, The Baltic Times, https://
www.baltictimes.com/estonian_minister__digital_services_must_be_made_available_to_all_eu_
citizens/
1842. X-tee factsheet, X-tee, https://www.x-tee.ee/factsheets/EE/#eng
43. Data Exchange Layer X-tee: How does X-tee work?, Republic of Estonia Information System Authority,
https://www.ria.ee/en/state-information-system/x-tee.html
44. Data embassy, e-estonia, https://e-estonia.com/solutions/e-governance/data-embassy/
45. Case Study: The world’s first data embassy– Estonia, OECD, https://www.oecd.org/gov/innovative-
government/Estonia-case-study-UAE-report-2018.pdf
19IRELAND
Although the term “digital sovereignty”
has received limited attention in Irish
public discourse to date, this concept
may have important implications for many
of Ireland’s key interests.
Seamus Allen,
Institute of International and European Affairs (IIEA)
20Introduction may play in shaping European digital policy
may have important implications for the future
of Ireland’s society and economy.
In Ireland’s public discourse to date, there
has been little public commentary on the
concept of European digital sovereignty by Key Topics of
Irish politicians or officials. This is despite the
phrase’s increasing prominence among many
Relevance for
EU policymakers.46 While the concept lacks Ireland
a precise definition, European Commission
President Ursula von der Leyen has written that Promoting and Regulating
digital sovereignty “describes the capability Digitalisation
that Europe must have to make its own
choices, based on its own values, respecting Ireland has a clear position on the importance
its own rules.”47 Nonetheless, there are some of investing in digital technologies both
significant policy topics associated with the nationally and at EU-level.48 In Ireland’s
term “digital sovereignty” which are particularly domestic policy this is reflected by initiatives
important for Ireland or upon which an official such as the “Disruptive Technologies Innovation
Irish perspective exists. Throughout, Ireland Fund”, worth €500 million (which invests in
has consistently emphasised the importance digital technologies in addition to non-digital
of Europe’s digital and economic openness, technologies)49 or in Ireland’s plans to use
favouring an ‘open’ model of strategic 32% of its EU-supported National Recovery
autonomy, and sought to ensure that digital and Resilience Plan - €295 million - for
sovereignty does not lead to a protectionist “accelerating and expanding digital reforms
approach for Europe. and transition.”50 This figure is significantly
more than the minimum of 20% that Member
Irish policymakers have made little explicit States are required to invest in digitalisation.
commentary on the concept of European digital Ireland’s plan focuses on six digital priorities:
sovereignty, and the country’s most recent (i) a shared government data centre to support
digital strategy dates from 2013. Nonetheless, the digitalisation of public services; (ii) ensuring
it is possible to identify aspects of digitalisation broadband connectivity and ICT equipment
related to EU digital sovereignty which are for schools; (iii) establishing an online census
particularly relevant for Ireland’s interests or option; (iv) promoting 5G technologies; (v)
upon which an official Irish view exists. First, supporting eHealth initiatives and (vi) a
this paper will examine Ireland’s approach to grants scheme to support the digitalisation
the promotion and regulation of digitalisation of businesses and digital innovation hubs
where this is relevant to EU policy. Then three throughout Ireland. The importance of digital
key topics of particular relevance to Ireland’s inclusion and digital skills is also emphasised
interests will be examined. The first is freedom in this plan. Despite this focus on digitalisation
of cross-border data flows between the EU however, Ireland’s most recent national
and the rest of the world, particularly the US digital strategy dates from 2013 and is now
and UK, Ireland’s two largest trade partners. A clearly outdated.51 A public consultation on
second subject is Ireland’s special regulatory developing a new national digital strategy
responsibility for the data protection of was held in 2018, but as of early 2021 no new
European citizens, a special role which is now national digital strategy has been released.52
increasingly challenged. Third is the European Nonetheless, an Irish AI strategy has recently
Commission’s proposal for a digital levy, been published and Ireland has a 2019-2024
which may disproportionately affect more national Cyber Security strategy.53 Ireland also
companies based in Ireland than elsewhere supports ambitious spending at a European
in Europe. Overall, the developing concept of level. In June 2021, the Taoiseach (Irish Prime
European digital sovereignty and the role it
21Minister), Micheál Martin, described Europe’s concerning the misuse of personal data in
current funding for innovation and the digital 2013 that “digital sovereignty” became a
and green transitions as inadequate and he prominent term in European policy discourse.59
expressed support for an even more ambitious In accordance with the EU’s GDPR, generally,
European approach.54 the transfer of personal data outside of the EU
is highly restricted, unless the third country in
Broadly, with regard to the regulation of question is deemed to have equivalent levels of
digitalisation, Ireland supports a regulatory data protection, or unless a special mechanism
environment that it deems innovation-friendly exists to uphold the data protection rights
and which would avoid over-burdensome of European citizens. For Ireland, the flow of
regulation. This focus is prominent in Ireland’s personal data between the EU and two of
submissions on the Digital Services Act package the EU’s most important partners, the United
and on the EU White Paper for Artificial States and the United Kingdom, is a particular
Intelligence.55 Both of these submissions concern, as these countries are Ireland’s two
demonstrate the Irish concern that the largest trading partners.60
European proposals could risk overregulating
and harming innovation. With regards to the The EU-US Privacy Shield framework that
Digital Services Act, a joint letter by Ireland, facilitated the transfer of personal data
Sweden and Finland in June 2021 raised between the EU and the US was invalidated
concerns regarding free speech implications by the Court of Justice of the European Union
about certain aspects of the proposed Act.56 in July 2020, creating serious difficulties for
transatlantic data transfers.61 The Court’s
Domestically, Ireland has been particularly judgement was prompted by concerns
active regarding the regulation of harmful regarding domestic US legislation and mass
online content. In Ireland, numerous pieces US security surveillance.62 Currently, many
of legislation (including an Online Safety Bill companies continue to transfer personal data
among others) are seeking to address issues between the US and the EU using Standard
including online harassment, intimate imagery, Contractual Clauses (SCCs). However, there is
hate speech, and transparency for online ongoing legal debate regarding the validity of
political advertising. However, concerns have SCCs to transfer personal data in this way and
been raised by a variety of stakeholders about the future use of SCCs is actively challenged.63
conflicts or problematic interactions between
domestic Irish legislation and upcoming Following Brexit, an initial European
European legislation when it comes to online Commission draft data adequacy decision
content regulation.57 Recently, cybersecurity which proposed enabling free flows of
has become a more prominent topic in Ireland, personal data between the EU and the UK64
following a major cyberattack against Ireland’s was met with significant concerns in the
healthcare system which caused major European Parliament and by the European
disruption.58 Overall, Ireland has a clear position Data Protection Supervisor.65 When the
on the importance of promoting and investing European Commission finally adopted the
in digitalisation and in ensuring an effective and data adequacy decision in June 2021, it came
innovation-friendly regulatory framework. with significant caveats. Most importantly,
the data adequacy decision can be reviewed
Ireland and cross-border data flows if UK data protection law is changed, and the
between the EU, US and UK data adequacy decision will automatically
expire after four years.66 As leading British
A critical issue for the European digital policymakers have openly discussed diverging
sovereignty initiative is personal data flows from the GDPR following Brexit, difficulties for
between the EU and the rest of the world. It UK-EU data flows may follow in the future.67
was following the Edward Snowden leaks
22Impediments to the free flow of personal the Data Protection Commission (DPC), has
data between the EU and the US or UK could experienced one of the largest increases in
have negative consequences for a wide staff relative to population in the EU,75 however
range of economic sectors in Ireland.68 This due to its cross-border responsibilities it faces
is particularly true for Ireland’s digital sector a disproportionately high number of cases
which accounts for approximately 13% of to regulate. In the Irish Government’s Budget
Ireland’s GDP and 26% of Ireland’s exports 2021, the DPC received an allocation of €19.1
according to Technology Ireland.69 The value million in funding, an increase of €2.2 million
of digitally-enabled service exports from over the previous year.76 The additional funds,
Ireland, which frequently rely on data transfers, however, were just over half of the €4.16 million
was estimated to be $171.9 billion in 2018 (€145 that the DPC had requested.77 Ms Dixon had
billion) - the second highest figure in the EU stated that the DPC needed these additional
after Germany.70 In 2020, Host in Ireland had resources because it sits at the “frontline of
predicted €7 billion of investments in data EU data protection regulations” and is acutely
centres in Ireland over the next five years; strained by the “disproportionate resources” of
however some of this investment may be the multinational corporations it must regulate,
predicated on the continued free flow of cross- warning that the DPC’s ability to operate
border data.71 effectively would affect Ireland’s credibility
on the world stage.78 Privacy activists both in
Some studies have estimated that the total Ireland and abroad, and other European data
prevention or major restriction of data flows protection regulators, have criticised the Irish
for the EU could cost the EU economy as a DPC claiming that the DPC’s processes and
whole as much as €300 billion.72 While, such procedures are inefficient and hinder adequate
an extreme loss may be unlikely in practice, GDPR enforcement.79 Despite hundreds of
these figures show the potential scale of the complaints on cross-border data cases, some
economic impact. A 2021 global study by the by other European regulators, as of mid-2021
Irish law firm William Fry found that for data- the DPC had only ever issued one cross-border
related investments, investors ranked the GDPR fine.80 Commissioner Dixon has argued
data-related regulatory regime as the most that enforcement is difficult due to the DPC’s
important investment factor to consider - and constrained resources, the complexity of the
more important than talent, ease of doing cases and the bureaucracy involved with the
business, and taxation policy, even though “one stop shop mechanism”, in which other
taxation policy was the most important regulators in Europe have allegedly been slow
consideration for investors in 2016.73 The in cooperating with and providing required
continuing uncertainty regarding personal information to the DPC.
data transfers thus poses particular risks for
the Irish economy. Both the Irish and European parliaments
have recently begun scrutiny of the Irish
Ireland’s Data Protection Role DPC. Privacy activists have warned the Irish
parliament that the alleged inefficacy of
Under the GDPR’s “One Stop Shop Mechanism”, the Irish DPC poses significant reputational
Ireland is effectively the lead data protection risks for Ireland.81 In May 2021, the European
regulator of the world’s largest digital Parliament passed a resolution calling upon
technology companies for their conduct the European Commission to take infringement
throughout the EU, as many of these companies proceedings against Ireland because of
are headquartered in Ireland. Politico has thus what it deemed to be an “insufficient level of
described Ireland as “the Western world’s first enforcement of the GDPR.”82 National data
line of defence against misuses of people’s protection regulators in other EU states have
data.”74 Since the implementation of the also sought the capability to launch cases of
GDPR, Ireland’s data protection regulator, their own against Irish-based companies.83 As
23a result of such steps, in June 2021 the Court However, some individual EU Member States
of Justice of the European Union clarified have introduced digital taxes or levies, which
that in certain specified circumstances, data has prompted tensions with the US, which
protection supervisory authorities can take believes that such taxes disproportionately
cases against firms located in other countries target American companies. The US has
for cross-border GDPR cases.84 It is likely that threatened trade tariffs against a number
as Europe focuses on digital sovereignty and of individual European nations for the
citizens’ control over their data, Ireland’s role introduction of digital services taxes or levies,
in data protection will come under increasing prompting concerns of a potential trade war.91
scrutiny and pressure.85 In contrast, the European Commission has
indicated that the digital levy would apply to
Ireland and the European Digital hundreds of companies, most of which would
Levy be European.92 In March 2021, Ireland argued
that the timing of the EU’s move towards a
The European Commission’s work to develop a digital levy risked undermining the OECD-led
proposal for a European digital levy is premised international tax talks and could rekindle trade
on the view that many digital corporations tensions with the US.93 In June and July, the US
produce revenues and profits online in countries likewise urged the EU to delay the release of its
in which they are not physically present and digital levy proposal, arguing that the European
therefore do not pay the same level of tax as initiative could undermine the OECD-led talks
their physical counterparts.86 The European on corporate taxation reform.94
Commission proposal for a digital levy had
previously been expected for July 2021 but is The international context of ongoing OECD-
now postponed until at least Autumn 2021 to led international tax talks potentially makes
prioritise a focus on the OECD-led international the upcoming EU digital levy proposal even
talks on corporation tax reform.87 more sensitive for Ireland, as it comes at a time
of possible disruption to Ireland’s corporate
In the OECD-led international talks on tax policy. However, the precise details of this
corporation tax reform, Ireland’s corporate tax levy, and how it will interact with the OECD-led
policy has provoked some controversy. Ireland corporate reforms, remains to be seen.
considers its corporate tax policy to be an
important attraction for foreign investment in
Ireland, and corporate tax paid by multinational
Conclusion
corporations, including digital multinationals, is
The digital policies that Europe pursues in the
a major source of Irish government revenue.88
years ahead may have a significant impact on
Under proposals discussed in the ongoing
the future of the Irish economy and society. The
OECD-led tax talks, the Irish Department of
precise nature and role of digital sovereignty
Finance has predicted that Ireland could lose out
in shaping Europe’s approach to digital policy
on over €2 billion of revenue per year, or a fifth
may thus have important implications and
of Ireland’s corporate tax intake.89 Ireland has
potentially poses both possible risks and
expressed considerable reservations on aspects
benefits for Ireland.
of proposals emerging in the OECD-led talks.
One possible risk is a reduction in Europe’s
Ireland is similarly concerned about the
openness. Key European policymakers have
implications of a European digital levy, which
might potentially either reduce Ireland’s highlighted that they seek an EU that is both
attractiveness as an investment location or digitally open and digitally sovereign. They
reduce Ireland’s corporate tax revenues. A have argued that there is no contradiction
previous European Commission proposal for a between these goals. Nonetheless the risks
digital services tax in 2018 was blocked by a of increased digital or trade barriers between
number of Member States including Ireland.90 the EU and its partners could arise as an
unintended outcome of other policy goals.
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