Agreed on the physical infrastructure and that those things will be done locally, I do not consider those things as a competitive advantage on the global market, compared to strengthening the local semi industry by doing an “Euro ARM” chip or some such.
No doubt that some of that money will benefit the European economy, with regards to the effectiveness and long term strategic view I do have my doubts, especially compared to what the US/Japan have been able to pull off.
Europe has tons of supercomputers, this is just the latest crossing a particular size that sounds cool in outreach and promotion. The research done on these machines (particle physics is a major consumer, see CERN) means there is a very healthy and large community around such tooling, and work is being done to onboard new fields as well. This is a meaningful outcome of such computers, even if they don't contain local free range chips ;)
I’d imagine the Japanese Fugaku system which is based on ARM and built by Fujitsu a more effective way to directly support a nation’s economy and engineering capabilities.
I could be wrong, of course, nevertheless I find it puzzling.