The Savings Investments Union (SIU): Unlocking Savings to Drive Innovative Investment
Reference
Article provided by Deloitte Tax & Consulting, SARL.
The Savings Investments Union (SIU): Unlocking Savings to Drive Innovative Investment
What is SIU about?
Addressing the Current State of European Capital Markets
Today, European capital markets face significant challenges. They lack sufficient opportunities, scale, and depth, with cross-border business still hindered by numerous barriers. Moreover, inefficiencies such as a considerable mismatch between savings and investments persist.
Currently, more than €33 trillion of European savings are held in currency and deposits across the EU for a population of 440 million[1]. In contrast, the USA boasts savings exceeding €104 trillion for a population of only 330 million.
Urgent Capital Requirements for Strategic Goals
At the same time, the European Union requires substantial capital to fund its future strategic objectives. For instance, the Draghi Report[2] estimates that €750-800 billion of additional investment per year will be needed by 2030.
Introducing the Savings and Investments Union (SIU)
To address these challenges, the EU Commission unveiled its Savings and Investments Union (SIU) strategy in March 2025. This ambitious initiative combines the Capital Markets Union (CMU) and the Banking Union (BU) and aims to connect savings to high-impact investments aligned with the EU's strategic priorities, such as competitiveness, innovation, green transition, digital transformation and defence.
What are the SIU key measures?
The SIU includes four main strategic policy measures aimed at fostering the development of capital and banking markets in the EU.
1. Citizens and Savings
Mobilizing savings is a cornerstone of the SIU, emphasizing greater retail participation in capital markets. To this end, low-cost savings and investment products will be introduced, alongside measures like promoting an investment-savvy culture, Designing a European blueprint for savings and investment accounts/products, with appropriate tax treatments or Expanding retail investor access to financial products aligned with EU priorities.
2. Investment and Financing
On the investment side, SIU aims to make financing more accessible for businesses by incentivizing European private and institutional investors like removing disparities in national tax procedures.
3. Integration and Scale
Despite previous initiatives, European capital markets remain fragmented, limiting their scale and efficiency. SIU will focus on Integrating markets using cutting-edge technologies like Distributed Ledger Technology (DLT), Tokenization, and Artificial Intelligence (AI) and reducing operational and national barriers faced by asset managers.
4. Efficient Supervision
To ensure fair competition and strong capital markets, SIU will harmonize supervision across the EU.
Unlocking Savings to Propel Investment - A Collaborative Effort for Stakeholders
Building the Savings and Investments Union is a shared responsibility of Member States, EU institutions, and key industry stakeholders (e.g., banking, insurance, asset management). There is consensus among policymakers on the urgency of this initiative and a commitment to turn ideas into action like:
Simplifying and converging the supervision recognizing local NCAs expertise
The regulatory framework must be streamlined to ensure competitiveness and remove national barriers. While efforts like investment fund passports have helped cross-border distribution, divergent market practices and high costs remain a challenge. SIU will focus on reducing these obstacles.
Leveraging from best and existing market practices
The EU should also reflect on success stories and further leverage and enhance those financial instruments that have proven of high value.
UCITS,AIFs and ETFs have proven track records as European cross border investment vehicles and can ideally support the Savings and Investments Union. ELTIFs are sufficient to cater for venture capital managers.
Proposing new attractive EU savings and investment products
It is vital to propose new savings products accompanied by targeted tax incentives. These products should be attractive and offer high stability and return profile for European across generations.
A review and adjustment of the PEPP (Pan-European Pension Product) framework to include pillar 2 pension schemes can support these objectives.
Key Takeaways for Future Success
While various factors will drive the success of SIU, its execution must be guided by key considerations like simplification, burden reduction and digitalization.
By unlocking the potential of €33 trillion currently held in savings and channeling them into innovative investments, the Savings and Investments Union has the potential to transform the European capital markets, fostering sustainable growth, technological innovation, and strategic resilience across the continent.
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References
- Eurostat; data as of end-2022. Includes households and non-profit institutions serving households (NPISH).
- M. Draghi - The Future of European Competitiveness, September 2024.