European governments are throwing money at all sorts of dubious things. I don't think being inept about how to create new business value is the worst thing they do. At least there is funding available.
I suppose the thing that ires you is - is this funding inclusive or is it only supplied to cronies. Knowing european systems, I think, like everywhere, having connections of course helps, but in general the systems are built with some level of inclusivity in mind.
And that's before you take in to account corruption and inclusivity. I do believe Europe (at least based on my experience living in Germany) makes effort towards inclusivity, but if you looked at where this money is going, it would be vastly weighted to the middle and upper class (though I concede I may be wrong on this point).
Given that you can easily bootstrap a tech company on the side with some contract work, my belief can be summed up as the practice is: 1) actively harmful 2) unfair 3) wasteful 4) unnecessary
I.e. 'actively harmfull' -> but just dropping state investment won't magically teach peoples how to do business in a customer oriented way. So you need some second order effects to kick in (i.e. people would then focus on market needs more etc).
I can't really comment on that. I don't know the german psyche enough to postulate on the second order effects.
Most of german industry has been grown historically in a corporative manner, so I'm a bit skeptical you could drive US style individual entrepreunship in just by dropping this or that government program.
European governments are throwing money at questionable startups in the hope of replicating SV. Being opposed to that is not the same as not believing in investment as a general principle (?!).