By design, central banks are cautious. Protecting a nation’s currency and financial stabilityare serious matters, ill-suited to risk-taking and chancy deals.In a world of Tiger Onitsuka trainers and tech-bro t-shirts, central bankers wear a suit and tie.
It may seemsuperficiallysurprising, then,when one of Europe’s central banks announces that it is moving its essential cloud services away from the tried and trusted U.S. giantsof Google,Amazon,and Microsoftto a company more famous for selling groceries at bargain prices.
Two weeksago,the Dutchcentral bank said its cloudservices wouldnow be supported by Schwartz Digits,part of the Lidllow-costsupermarket group(latest offer,a five-pack of oranges for $1.34). Schwartz Digits was originally built to support the retailbusiness,bringing value-butterand eggsto grateful consumers.It is now a successful provider ofsecuredata services to European businesses and government organizations.De Nederlandsche Bankis just the latest win.
A trend is developing in Europe that should give theAmerican corporate world, and particularly theWhite House,pause for thought. The U.S. tech giants, whose services are lauded for their performance, are being increasinglyeschewed in favor of European alternatives. The Dutch government hasalso announced its first deals withStackIT, a subsidiary of Schwartz Digits.
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The country’s justice and security minister,David van Weel,said the agreement was “an important step in reducing our dependence on parties outside Europe and strengthening our digital resilience,”Dutch Newsreported.Other customersofStackITinclude Commerzbank and the Hamburg Port Authority.SAP has also announced moves to strengthen its European-based digitalinfrastructure.
This is not an issue of skills or scale–Google Cloud, Amazon Web Services and MicrosoftAzure have plenty of both. Rather, geopolitical riskis prompting actionas Americanand European approaches todigitalsecurity diverge.Protections against Chinese providers have long been “top of mind”.The same is now true of the U.S. as Europeseeksto become more“digitallysovereign”in how it approachesdata security andresilience.
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Under the U.S. Cloud Act,passed in 2018,Americantechnologyoperators can be required by law to hand over data to theU.S.authorities.The possible risk of aEuropeancountry’s data being demanded by a foreign nation, even ifthe service is provided from a European center, is one too high to contemplateacrossamyriadofdisciplines, including healthcare, governmentservicesand banking.The American firm, Palantir, has faced controversy in the U.K. after a data deal was signed with the country’s revered National Health Service.
Critics of the U.S. Cloud Act say the risks are real. Last year, Donald Trump issued an executive order claiming the International Criminal Court, based at theHague in the Netherlands, had“engaged in illegitimate and baseless actions” against America and Israelover Gazaand sanctioning its chief prosecutor, Karim Khan.Brad Smith, the President of Microsoft, deniedthatthe ICC’saccess toitsserviceshad beenaffectedafter the Associated Press reported thatKhan’semail accounthad beensuspended.“Asset freezes and targeted sanctions against ICC staff have a chilling effect on companies and civil society organizations that might otherwise engage with the ICC,”left-leaningmembers of the European Parliament said.
A few months later, the ICC announced that it was moving its dataoperationstoopenDesk,part of theZenDisCenter for Digital Sovereignty, which is backed by the German federal government. “OpenDeskembodies our mission to lay the foundation for autonomous, effective digital administration in Germany and Europe by promoting digital independence while enabling modern workflows,” theorganizationsays on its website.
The President often talks of “America First”.For Europe, “America second” or “America not all” is becoming increasingly true.
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