alt Hacker NewsI feel the article is a bit roundabout, but eventually gets to the point: "Sovereignty" is not (mainly) about physical location, it's about which legal entity controls the data and whether or not that entity is subject to US jurisdiction and could be forced to disclose the data to US companies or agencies, in violation of EU law.
Which is mightily funny because in the opening paragraph the article equates "anti-free movement" with "problematic baggage". It's a problem if people can't move freely in and out of Europe, but not data -- that's our red line!