European policy makers recommend creating a $110 billion sovereign wealth fund to create "European champions" in tech

(European Parliament/Flickr)

EU policy makers have drafted a proposal to create an investment fund to help boost Europe's tech sector.

The proposed plan, which officials call the European Future Fund, echoes president-elect Ursula von der Leyen's own promise to invest in EU companies and push back against encroachment by foreign technology.

The document warns that unless Europe creates its own domestic giants, foreign companies like Google, Amazon, Alibaba and Tencent may gain significant influence in Europe:

The emergence and leadership of private non-EU competitors, with unprecedented financial means, has the potential to obliterate the existing innovation dynamics and industrial position of EU industry in certain sectors.

The fund, the document claims, would invest in equity, not research or development, and focus on creating products. Such an approach "will allow the fund to meet the strategic objective of supporting European champions while maintaining financial stability."

The fund is only a recommendation and not an official policy. President-elect von der Leyen will assume office on November 1.