What OP means by cloud provider? Cloud is overused term. That said, we have Hezner, OVH and Scaleway. You can ask other way: why US don't have cheap well known bare metal provider.

I meant cloud service providers offering both IaaS and PaaS. I believe Scaleway fits that but still it is far from dominating in the EU.

For starters, because EU isn't a country, rather a union of countries each with their languages, regulations, and tax mechanisms.

Still, in other areas is was possible. For example in the case of Airbus they managed to build a European counterpart for US players like Boeing.

Airbus was originally heavily sponsored by French and German governments, long before EU even existed.

The dominant cloud (assuming you mean cloud like AWS etc) are in fact US owned companies with massive DC's in Europe, e.g AWS in Ireland.