I European household savings could become a new source of funding for rearm of the EU. This is one of the hypotheses that the European Commission is working on in the context of the proposal for theSavings and Investment Union, a plan that aims to channel private capital towards strategic objectives of the Union. The measure is included in the White Paper on the Future of Defence, a document that sets out guidelines for greater integration of the sector. It states that “the Savings and Investment Union will help channel additional private investment into the defence sector”.
The idea of directing private savings towards productive investments is not new. In bank accounts of European citizens they lie approximately 10 thousand billion euros, often with zero or very low returns. If EU families adopted investment habits similar to those of the Americans, up to 8 trillion – or about 350 billion per year – could flow into the financial markets of the Union. However, in addition to inactive savings, a quota significant of European capitals is invested in US stocks and funds, attracted by the higher yields and greater dynamism of overseas financial markets. According to a study by Arel Single Market Lab, Jacques Delors Centre, Jacques Delors Institut and Ie Global Policy Center, every year around 300 billion euros leave Europe to be invested in the USA.
Compared to a year ago, however, the priorities of the European Union have changed dramatically: attention is now focused on security and defence. Although the details are still being worked out, the European Commission is working on a proposal that should be ready between April and June 2025. It is certain, however, that Brussels wants to direct private savings towards investments with strategic impacts for the Union.
The “Savings and Investments Union”
At the heart of the proposal is the creation of a “Savings and Investments Union” (SIU), a system designed to make the European capital market more efficient. According to a document published by the Commission, the reports by Mario Draghi and Enrico Letta have highlighted a strong imbalance between savings and investments: on the one hand, many citizens keep their savings in low-yield deposits, on the other, businesses – especially young and innovative ones – struggle to access the capital needed to grow and develop.
At the same time, the EU has an increasing need for resources to finance strategic projects in industrial competitiveness, energy and digital transition, and of course the strengthening of European defense. To date, the banking sector remains the main channel of financing, with bank loans accounting for 2023% of non-financial corporate financing in 50,43. However, to support the economy and stimulate growth, Brussels aims to develop alternative investment channels.
Strategies to encourage investments
The EU plan does not include any forced impositions or levies, but focuses on incentives e concessions to encourage citizens to invest. The Commission wants to make available new, easy-to-use and low-cost savings and investment tools, to facilitate access to financial markets. To this end, one of the proposed tools is the Individual savings plans (Pir) Europeans (a model already tested in Italy in 2017), which offer tax advantages, such as tax relief of dividends and capital gains for those who decide to maintain investments for a defined period
Another central point is the simplification regulations, with more homogeneous rules at European level to reduce bureaucratic barriers and facilitate cross-border investments. Alongside these interventions, thefinancial education will play a key role in helping citizens better manage their savings and make the most of investment opportunities.
The objective is twofold: on the one hand, to guarantee savers safer and more profitable opportunities, on the other, to strengthen the European capital market, stimulate business growth and slow the hemorrhage of capital towards the USA.
