On Wednesday (19 March), the European Commission presented a comprehensive strategy for the Savings and Investment Union (SIU), designed to reshape how the EU financial system directs savings into productive investments. This initiative integrates two previous proposals, the Capital Markets Union and the Banking Union. Moreover, the proposal seeks to improve citizens’ access to capital markets—potentially offering higher returns on savings—while also making it easier for companies to secure the funds they need for innovation and growth. Thus, this initiative could become a key catalyst for driving economic growth, strengthening competitiveness, and creating jobs across Europe.
The SIU framework rests on four interconnected pillars:
- Citizens and savings: Retail investors are central to the plan. The Commission seeks to broaden access to capital markets, offering citizens “more and safer opportunities to invest” while boosting long-term wealth. Initiatives include tax-advantaged savings accounts, enhanced financial literacy programmes, and reforms to pension frameworks to encourage auto-enrolment and cross-border accessibility.
- Investment and financing: To address the €750–800 billion annual investment gap identified in the Draghi Report, the SIU prioritises easing access to capital for SMEs and innovative firms. Proposed measures include revising securitisation rules to free up bank liquidity, expanding venture capital funds, and leveraging public institutions like the European Investment Bank (EIB) to attract private co-financing.
- Integration and scale: Market fragmentation remains a barrier. Despite regulatory harmonisation, cross-border inefficiencies persist. The Commission plans legislative proposals to streamline market infrastructures, reduce duplication, and lower transaction costs.
- Efficient Supervision in the Single Market: An efficient supervisory framework is critical. The EU’s current system relies on national authorities and convergence tools. The Commission proposes transferring some supervisory tasks to EU-level bodies to ensure consistency—a move facing resistance from member states.
Financial Services Commissioner Maria Luis Albuquerque, speaking at the launch of the initiative, stressed the transformative potential of the SIU. She stated that the SIU “represents an opportunity to step forward for Europe’s financial and economic future. This is a defining moment for the EU.” Her remarks underlined the urgency of reform, noting that if Europe fails to act swiftly and collectively, it risks missing out on crucial opportunities for wealth creation and economic stability.
European Council discussions
EU Heads of State and Government convened in Brussels on Thursday (20 March) to discuss the SIU, among other topics. EU leaders broadly supported the initiative. The conclusions on the SIU remained mostly unchanged, with even the contentious issue of single supervision for non-banks passing without significant debate. However, the topic was diluted into a lengthy, ambiguous statement, pledging only to assess the conditions for enhanced supervision rather than committing to concrete action.
Nonetheless, the real challenges will emerge later this year when the Commission translates its commitments into concrete policies. This process will demand tough compromises from national governments to advance a unified financial framework. Among these challenges, centralised oversight remains a contentious sticking point. France champions EU-level oversight to curb fragmentation, while 11 countries—including Ireland and Luxembourg—prefer national control, fearing loss of sovereignty. During the summit, French President Emmanuel Macron proposed a hybrid model inspired by EU competition law, where enforcement is shared between the Commission and national authorities. However, the proposal fell short of reaching a compromise.
Conclusions
In summary, the Savings and Investment Union is a critical step towards modernising the EU financial system. By linking household savings with corporate investment needs and addressing longstanding challenges such as regulatory fragmentation and supervisory inefficiency, the strategy could boost economic growth and financial stability in the EU. As the Commission embarks on the next phase of consultations and legislative proposals—targeting key areas for impactful action in 2025—the success of the SIU will largely depend on the collective commitment of EU institutions, Member States, and private stakeholders.
