A

Savings

and

Investments

Union

to

finance

Europe’s

future

Executive summary 

The current political cycle will be critical for the EU’s ability to close its competitiveness gap, decarbonise its economy, strengthen its supply chain security and build its resilience. Achieving these goals demands significant investment. 

Public funding is only around 1 per cent of EU GDP, and falls far short of the estimated €750–800 billion needed each year. Venture capital fell from 0.09 per cent of EU GDP in 2022 to just 0.05 per cent in 2023, and European households invest €300 billion annually outside Europe.

Capital markets must play a greater role. The EU must press ahead in attracting global capital and mobilising domestic savings to unlock the liquidity needed to power Europe’s growth. The upcoming Savings and Investments Union (SIU) must ensure that all companies – especially SMEs, startups and scaleups – can access financing in Europe, rather than relocating due to lack of capital. 

To succeed, the SIU must: 

•     Accelerate capital market integration, with a strong focus on harmonising insolvency and tax regimes, reducing fragmentation and allowing recent reforms to deliver impact. 

•     Promote simplification and convergence across Member States, without distorting competition. 

•     Enable innovation-driven growth, by advancing the use of distributed ledger technology (DLT) and artificial intelligence (AI) in market infrastructure, supporting tokenisation and facilitating pan-European initial public offerings (IPOs). 

•     Unlock retail and pension savings through flexible, tax-incentivised investment products, stronger alignment with the European Investment Bank (EIB) and a renewed push for the pan-European personal pension product.

•     Strengthen equity financing by building a deeper, fairer market for listings and venture capital, streamlining access to EIC Fund resources, and aligning public-private funding to drive critical technology investment.

•     Enhance bank financing by completing the banking union, improving securitisation rules and setting clear milestones for the European deposit insurance scheme. 

•     Modernise supervision by aligning standards, harnessing technology and gradually advancing towards a single supervisory framework for EU capital markets. 

If delivered successfully, the SIU can provide the financial infrastructure Europe needs to lead in the digital and green transitions, boost its economic security and close its competitiveness gap with global peers.