There are plenty of EU domiciled Managed Service Providers who do have the skills though.

Having your government infrastructure run in country and managed by your citizens seems like a good idea just in general. It helps to develop local skills and the people living in country have a better feel for the needs of the local people.

I am an American but this just seems like a good idea even if the current geopolitical situation was better.

Are you saying deploying Debian/BSD on some servers in the basement of a government building is too complicated and more expensive than paying Microsoft/AWS?

Governments aren't scale-ups/unicorns to need the scalability and global availability of cloud, they're ossified known quantity entities with predictable userbases and traffic across a very specific geographical region. On-prem is perfect for that.

No it's essentially just that a bunch of hype people sold everyone on the idea "the cloud is the future" and so even government types think they have to do it to modernize even if it costs more, is less secure, and less reliable than just paying your own IT guy to do it.

On-prem is not expensive or complicated, people just make dumb choices. Any IT engineer with two years of experience can run a small on-prem data cluster.

Government agencies can pool their resources to operate a shared data center. If you take just a tax office, they are operating at scale where they have sufficient demand to operate 2-3 data centers per country in half of Europe. As for the skills, a for-profit SOE or a non-profit can deal with this as a regulated primary contractor. IT is a special case where consolidation and moving ops in-house actually makes sense at that scale. US gov does not do that likely for political reasons.

Before the concept of cloud was a thing, every company and a computer room, smaller ones were literal closets, bigger ones were large data centers, with everything in between.

Skills can be hired and trained.