The rumor on the Google blog is that Twitter was looking to offer Sundar Pichai a CEO position, so this move was made to keep him.
Perhaps there are some additional legal protections gained by doing this reorg as well.
It's not just that the French and German government are going to move to doing business with non-US companies for email. There are many reports  of governments and companies throughout the world choosing non-US cloud providers who promise not to have servers in the US. This is showing up on companies earnings reports in reduced overseas sales.
At first I thought it was silly - all governments want to be able to get their hands on data stored in their domain, so moving from the US just changes the potential actor. Then I thought "why would you store your secrets in a place you don't control?" If you've got something very, very secret, you don't store it in a bank, you hide it somewhere on your property (and no, I do not have anything very very secret
After a number of decimal places, nobody gives a damn.