It's not impossible to meet Hollywood's financial power, also its artistic power... Germany alone for example has producers (Constantin Film), studios (Bavaria, Babelsberg), VFX shops (Scanline, Stargate, Pixomondo) or tech rental (ARRI), and not to mention all the locations which many US blockbusters regularly use.

The core difference America has and what makes Hollywood so dominant is that everything except locations is pretty much concentrated in Hollywood (with Vancouver and Toronto offshoots in Canada), whereas in Europe everything is splintered - Germany alone has Cologne, Berlin and Munich. That makes it harder for all parties involved in a production (please don't get me started on the disgrace that is high-speed internet connectivity here) and, crucially, we don't have the informal "network effects" resulting from having everyone drink at the same bars in one town.

If anyone, be it a billionaire or a government, in Europe were to fund a "cinema town" modeled after Hollywood, inter-European infighting would kill the project before it even had a chance at getting started. We can't even get our heavy industry companies merged so that they're sizable enough to fight against Chinese and US companies - how are we supposed to successfully do that for a industry that doesn't have much economic relevance?