a.) Lack of doesn't imply inability b.) There are plenty of chip fabs in Europe
The best Europeans are 10x worse, only China is catching up with only 2x worse.
Europe is allied with Taiwan and South Korea, and until recently also with the United States. Those countries can't build new chip factories without European lithography. Do you want everyone to innovate and grow by having each country focus on what they are good at, or do you want everyone to burn trillions reinventing the wheel over and over again solely for their own domestic market?