In its communication dated 19 March 2025, the European Commission unveiled an ambitious initiative with the potential to reshape Europe’s economic landscape: the Savings and Investments Union (SIU). The SIU aims to use Europe’s savings more productively and accelerate investment in climate protection, digitalisation, defence and innovation – in particular through a more efficient financial system that better links savings with investment needs.
Table of Contents
What the EU is doing – and why
In view of preparing for the SIU, Commission services have collected ideas from the private sector, civil society and various national authorities and common feedback included, without surprise, the removal of barriers for cross-border activity, simplification and proportionality in regulation and a closer link between EU action and local economies.
Thus, the SIU seeks to create better financial opportunities for EU citizens, while strengthening the financial system’s capacity to channel savings into investments. It is designed to:
- offer more choice for savers to grow their household wealth
- enable businesses across the EU – especially SMEs and startups – to scale up and invest
- build a resilient financing ecosystem aligned with the EU’s strategic priorities
According to the Draghi report, Europe needs an additional €750–800 billion in annual investment by 2030 to tackle challenges like climate change, the digital transformation and shifting geopolitical dynamics – a figure likely to increase with rising defence needs. Much of this funding must reach SMEs and innovative companies, which cannot rely solely on bank loans. Integrated capital markets – alongside a robust banking union – are key to closing this gap.
In this sense, the SIU is more than a financial policy: it is aimed at becoming a horizontal enabler of Europe’s economic, social and security goals.
Four strategic pillars of the SIU (extracts)
1. Citizens and savings
- Launch of EU-wide savings and investment accounts, including tax incentives
- Encouraging retail participation in capital markets
- Strengthening financial literacy
- Reforming and developing the supplementary pension sector
2. Investment and financing
- Promoting equity financing via insurers, pension funds and EU programs
- Revamping venture capital regulation (EuVECA update)
- Deploy and support further investment programs (e.g., for disruptive innovation) together with the EIB Group
- Proposals to (i) remove differences in national taxation, (ii) simplify due diligence and transparency in securitisation and (iii) support exits by investors in private companies
3. Integration and scale
- Removing regulatory fragmentation within the Single Market
- Facilitating cross-border fund distribution
- Modernising market infrastructure using blockchain and AI
4. Harmonised and efficient supervision
- Enhancing supervisory convergence
- Delegating oversight of systemically relevant actors to EU level
- Eliminating divergent application of EU rules and protectionist behaviour across Member States
Banks still matter
The SIU complements – not replaces – Europe’s banking system. Banks remain vital as primary lenders to the EU economy and as enablers of capital markets. Completing the Banking Union and preserving the competitiveness of EU banks remain key objectives.
The path to implementation
The Commission is implementing a structured, inclusive approach and has laid out a phased action plan through 2027, including legislative reforms, strategic recommendations and targeted funding initiatives.
This process is designed to ensure dialogue and collaboration with Member States, the financial industry and civil society. Indeed, building the SIU will be a shared responsibility of Member States and EU institutions and institutional cooperation will be critical for success.
Conclusion
The Savings and Investments Union is more than just financial policy. It is a key project for Europe’s prosperity, sovereignty and strategic resilience.
To meet its goals in climate, defence, digitalisation and social cohesion, Europe must put its capital to work more efficiently. The EU has now laid the foundation. The success of the SIU will depend on bold execution – and collective commitment.
