The European Commission drives the Savings and Investments Union to boost the economy

The European Commission presented the Savings and Investments Union (SIU) strategy last Wednesday, an initiative aimed at improving the connection between savings and investments within the EU. The proposal seeks to expand access to capital markets and provide businesses with more diversified financing options. Through this measure, Brussels aims to strengthen economic growth and competitiveness by facilitating the mobilisation of resources for strategic sectors.

According to the assessment of the 27 Member States, the EU holds a significant volume of savings deposited in banking institutions, which in many cases offer limited returns. For this reason, the European Commission’s strategy seeks to promote the diversification of financial resources, favouring access to investment products. The initiative also aims to enhance the financing mechanisms for businesses in a context where their investment needs have substantially increased.

To address challenges such as the ecological transition, digitalisation, and new geopolitical dynamics, the EU will need to mobilise an additional €800 billion per year until 2030, according to a report prepared by Mario Draghi for the European Commission. In this context, the SIU is envisioned as a tool to facilitate the flow of capital to innovative businesses and SMEs, whose access to bank credit is more limited. In this regard, Brussels emphasises that a more integrated financial system would improve the use of available resources by balancing the supply of savings with the demand for investment.

Four action pillars

The SIU strategy is structured around four main areas of action. First, it focuses on improving access to investment options that could generate higher returns compared to savings. At present, savings are concentrated in bank deposits, which are a secure and easily accessible instrument, but with limited capacity to generate long-term returns. Therefore, the European Commission proposes developing measures that facilitate investment in capital markets for those who wish to do so.

The second pillar of the initiative centres on investment and financing. The proposal aims to expand the availability of capital for businesses across various sectors, with particular attention to SMEs. In this regard, Brussels seeks to promote investment in sectors considered strategic, such as innovation, decarbonisation, and security.

The third pillar of the SIU includes measures aimed at reducing the fragmentation of financial markets within the EU. European policymakers believe that the existence of regulatory and supervisory obstacles in different Member States hampers the expansion of businesses across the entire 27-member market. As such, the proposal calls for the removal of barriers to cross-border operations of market infrastructures and asset management, aiming to facilitate the integration of the financial sector at the European level.

The fourth pillar of the strategy focuses on supervision. The European Commission proposes reinforcing the harmonisation of financial market rules so that businesses and entities operating in different countries are treated equally. To this end, it suggests improving supervisory convergence tools and assessing the possible reassignment of responsibilities between national authorities and European institutions.

Relation to other initiatives

The SIU is part of a wider framework of strategies developed in recent years to deepen financial integration within the EU. The initiative complements, for example, the Capital Markets Union and the Banking Union, two projects aimed at improving access to finance and the stability of the European financial system. Brussels also notes that the SIU will contribute to the European competitiveness agenda, at a time when the EU seeks to strengthen its investment capacity against other global economies.

Beyond the potential benefits for investment and growth, the SIU aims to consolidate the competitiveness of the European financial sector. The Commission has announced that it will carry out an assessment of the banking system’s situation in the single market, analysing its capacity to compete in the global environment and its role within the strategy for financing the economy.

Next steps

According to the European Commission’s intentions, the measures included in the SIU strategy will be developed through various initiatives that will be rolled out progressively over the coming years. However, those with the greatest impact on competitiveness will be prioritised. The first actions are expected to be implemented this year.

To ensure the initiative’s follow-up, the 27 Member States have announced that an interim evaluation will be published in the second quarter of 2027. This report will assess the progress of the SIU’s implementation and its impact on financing the European economy. Brussels has highlighted that the success of the initiative will depend on the cooperation between European institutions, Member States, and the private sector, with the goal of achieving a more integrated and efficient financial system.