The problem with that plan is that if Google were to release such a service in the EU, the EU would then fine Google for using their search monopoly to prop up a service in another industry (News). The EU did something similar when Google used their search monopoly to promote Google Shopping.
Sure, but if google decides to pull out of european news, someone else might find it an attractive idea. And , considering that (if this passes) EU will have made it impossible for a european company to do that, it will be somewhere outside the EU.
EU is gonna EU.