Savings and Investments Union: A powerful engine for sustainable economic growth

With our opinion, at the request of the European Commission, we welcome the Savings and Investments Union as an important step towards transforming the EU’s fragmented financial landscape into a more integrated and efficient system. By improving how savings are channelled into investments, the EU hopes to strengthen competitiveness, support businesses—especially SMEs—and provide citizens with better opportunities to participate in value creation.

In this context, the EESC recommends focusing on equity funding, further integrated trading and post-trading infrastructure and more centralised supervision by the European Securities and Markets Authority (ESMA), while transforming savers into effective retail investors.

Despite past initiatives like the Capital Markets Union (CMU) Action Plans, fragmentation continues to limit cross-border capital flows, keeping equity financing underdeveloped. This leaves many companies reliant on bank loans, thus limiting risk-taking and innovation. At the same time, retail investors face a fragmented and shallow market and low financial literacy, deterring broader participation. Moreover, the EU experiences a ‘brain drain’ as innovative talent moves abroad, weakening EU's economic base and potential.

While strongly supporting the Savings and Investments Union initiative, the EESC insists on tangible reforms for its success. It recommends enhancing the interoperability and efficiency of financial infrastructures through cutting-edge technologies like Target2-Securities. Supervision of cross-border market players should be shifted to ESMA, whose capacities need to be significantly upgraded. In addition, other recommendations include:

1. To focus on addressing the equity gap. This requires harmonising company, insolvency, and tax laws to make pan-European investment easier, encourage SMEs to adopt more resilient capital structures, and provide retail investors with access to a wide range of safe, cost-effective investment products, for which improved financial education essential.
2. To develop supplementary pensions, without undermining public pension systems. Automatic enrolment in occupational pensions, with clear investment outcomes and robust regulatory oversight, should be encouraged.
3. To explore a preferential tax treatment for retail investors, though national-level tax diversity may limit feasibility.
4. The creation of an EU investment fund financed through a mix of national contributions, EU-level resources, and possibly joint debt issuance—drawing on the successful model used during the COVID-19 recovery.
5. Promote public-private partnerships to strengthen venture capital and start-up funding. A European cloud services provider is also proposed to enhance digital and data sovereignty.

Finally, the EESC calls on the Commission to develop a transparent KPI dashboard to measure the Savings and Investments Union’s progress. Suggested metrics include cross-border investment flows, transaction costs, SME fundraising levels, and legal harmonisation advancements.

In conclusion, the EESC firmly believes that the Savings and Investments Union can help turn Europe’s savings into a powerful engine of sustainable economic growth. However, success depends on credible implementation, public trust, and strong cooperation between European institutions and Member States. With the right tools, supervision, and vision, the Savings and Investments Union could become a cornerstone of Europe’s strategic autonomy and economic resilience.

By Antonio GARCÍA DEL RIEGO, EESC member and member of the study group of Opinion ECO/670 Communication on a Savings and Investments Union.