In her political guidelines for 2024-2029, President Ursula von der Leyen announced that the European Commission would propose ‘a European Savings and Investment Union, including banking and capital markets’.
The initiative aims to combine the Capital Markets Union (CMU) and the Banking Union (BU) and is based on the results they have achieved in the past.

It is recalled that there have already been two action plans for the Capital Markets Union, in 2015 and 2020 respectively, and significant steps towards the creation of the Banking Union since 2012.

In her mission letter, von der Leyen tasked Commissioner Maria Luís Albuquerque with developing this European Savings and Investment Union in order to leverage the enormous wealth of private savings in support of broader European objectives and to focus ‘in particular on helping people save better, promoting capital for innovation, unlocking digital finance, ensuring the competitiveness of the financial sector and taking advantage of sustainable finance’.

Commissioner Maria Luís Albuquerque announced that she would present, within the first few months of taking office, a comprehensive approach on how the EU, member states and market participants could move forward to realise this Union.

This approach, which will take the form of a Communication, is scheduled to be presented in the third week of March.

In recent months, many political institutions and actors, stakeholders and experts have expressed their support for the European Savings and Investment Union, including Enrico Letta and Mario Draghi.

In their respective reports, Letta and Draghi emphasised the inefficiencies that remain in the EU’s capital markets, in particular a significant mismatch in terms of savings and investment in the EU, where citizens’ wealth is being insufficiently remunerated by low-yield deposits, and companies, especially young and innovative ones, have difficulty meeting their capital needs due to inadequate financing options.

They therefore considered it necessary to take measures to ensure a better link between savings and investment in order to create real economic impacts over the next five-year period.

According to the European Commission, EU citizens have significant savings: in the second quarter of 2023, EU households saved 14.79 % of their disposable income.

In 2023, EU citizens held EUR 11.63 trillion, or 31.01 % of their savings, in cash and deposits, which offer limited returns.

For the Commission, without greater participation in the capital markets, EU citizens are missing out on opportunities to create wealth by earning higher returns on their savings in the long term.

At the same time, the EU increasingly needs large amounts of capital to finance its broader policy objectives, including competitiveness, innovation, green, digital and defence investments.

The banking sector remains an important source of financing in the European Union: in 2023, bank loans accounted for 50.43 % of non-financial corporate financing, and while progress towards an integrated banking market has been substantial, there are outstanding aspects of the Banking Union that could further boost bank financing in absolute terms.

To summarise, the communication is expected to present a strategy for the European Savings and Investment Union and measures to be taken in a limited range of areas, with a clear link to strengthening competitiveness and productivity in the EU economy.

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