Ten trillion asleep

The figure has become a mantra in Brussels: ten trillion euros. That is what European households leave sleeping in bank deposits, a reserve that exceeds the euro area’s annual GDP and makes the Union the thriftiest continent in the developed world. The paradox sits in the next sentence: this same continent complains that it lacks the capital to finance its defence, its transition and its technology champions. The money is there, it does not circulate. The Savings and Investments Union, unveiled by the Commission in March 2025, is the latest attempt to resolve that contradiction. It is one year old, on a tight timetable, with a blind spot no one wants to name.

One statistic captures the waste better than any speech. Every year, European households save about €1.4 trillion, against €800 billion for Americans, and yet close to €300 billion of that European saving leaves to finance markets outside the Union, mostly US assets. Europe exports its savings to the very economy it accuses of outrunning it, then re-imports the return as dividends paid to others. The project labelled SIU wants to close that leak. Whether an action plan can repair what three decades of unfinished integration left broken is the open question.

Rich savings, poorly put to work

The diagnosis is old and stubborn. European households are not short of money: they immobilise it in the least productive form there is. Union households keep 34% of their financial assets in deposits and cash, against 14% in the United States, and hold only about 17% of their wealth in listed securities, equities, bonds and funds, where Americans place 43%. The cost of that allocation gap runs into lost points of wealth: over a decade of rising markets, the cautious European saver watched their American counterpart grow richer while their own savings account eroded purchasing power.

This conservatism is not just a matter of temperament. It reflects the absence of a simple, legible, tax-neutral channel from deposit to long-term investment. Facing twenty-seven tax regimes, as many national savings products and financial information rarely comparable from one country to the next, inertia is the rational choice. It is that inertia the Commission wants to turn into flow, at the precise moment the Union discovers the scale of its needs.

Because demand for capital has exploded. The Draghi report of September 2024 put the additional annual investment effort at around €800 billion, close to 5% of the Union’s GDP, to close the innovation gap, finance decarbonisation and reduce strategic dependencies. The former ECB president was clear on the source: most of it will have to come from the private sector, not from already stretched public budgets. In other words, there is a pool of dormant savings on one side, a wall of investment to finance on the other, and no plumbing that efficiently connects the two. The SIU is meant to be that plumbing.

The difference is not trivial. Twenty points of household wealth separate the European allocation from the American one, to the detriment of the instruments that finance the productive economy and reward the saver. That is the hole the SIU is trying to fill.

The rebranding of an old project

The savings union is not a new idea: it is an old project that changed its name because the old name had not kept its promises. From 2015 to 2025, Brussels carried the Capital Markets Union, two successive action plans meant to build a single market for financing and wean European companies off their dependence on bank credit. The verdict, ten years on, fits in one word: fragmentation held. Markets stayed national, listings kept migrating to New York, and the share of savings invested in securities did not move.

Hence the March 2025 relaunch, under a refocused label. The very name shifts the emphasis: it no longer speaks first of markets, it speaks of savings, that is, of the citizen. That semantic shift, presented as a new strategy on 19 March 2025, owes as much to the Letta and Draghi reports as to a political observation: selling financial integration on the promise of an abstract single market never mobilised anyone, whereas promising the saver a better return might create a social demand. The bet is clever. It changes nothing about the fact that the obstacles remain the same, as a European Parliament overview notes, stressing the persistence of the same barriers under a renewed wrapping.

The strategy is organised around four workstreams: channelling citizens’ savings, widening the supply of financing for companies, integrating and scaling market infrastructure, and converging supervision. The first three are technical and negotiable. The fourth is political and explosive, and we will come back to it.

What Brussels put on the table

The Commission deserves credit for one thing: it did not stop at the press release. In a little over a year, several concrete texts have been tabled, and it is that legislative material now under negotiation.

The first floor, the one that governs the banking logic of the plan, is the revival of securitisation. The Commission presented its securitisation package on 17 June 2025, the first concrete initiative of the SIU, designed to ease the capital charges and administrative burden weighing on good-quality deals. The idea: let banks move loans off their balance sheets to sell them to investors, freeing up capacity to lend again. Securitisation is the instrument that built the depth of the American credit market, and the one Europe has distrusted since 2008, for reasons our guide on CLOs and leveraged loans sets out. The text has run its course: committee review in ECON in early 2026, around five hundred amendments tabled, Parliament’s position finalised in spring ahead of the trilogue. It already divides: the centre-right groups see the missing tool, social democrats and greens smell a return of pre-crisis machinery, and part of the industry judges that the version under discussion does not go far enough to genuinely revive the market.

The second floor aims at the saver directly. The Commission issued a recommendation on savings and investment accounts, simple and tax-advantaged wrappers inspired by the Swedish model, meant to give every household a legible entry point to the markets. To this is added a pensions component, with the review of the pan-European personal pension product and recommendations on auto-enrolment, a file on which the Council agreed its negotiating position in June 2026. The goal is to build, through the funded pension pillar, the base of long-term investors that Europe lacks.

The third floor takes on the corporate framework and the plumbing. The Commission proposed on 18 March 2026 a 28th regime, an optional European legal status branded EU Inc for innovative companies, which could opt for a unified company law rather than juggling twenty-seven national codes. And above all, in December 2025, it tabled the package with the heaviest consequences, the one everything else depends on.

The sequence tells both the ambition and the difficulty. The texts have followed one another for a year, but the most structural one, the centralised supervision of 4 December, is also the one that touches the sovereignty member states are most reluctant to share. The rest of the timetable hangs on that knot.

The real lock: supervision, and the twenty-seven

Here is the crux of the file, the one the press releases dress up. On 4 December 2025, the Commission published its integration and supervision package, which proposes to centralise part of supervision at European level and to extend the direct powers of ESMA, the European markets authority, over significant infrastructure and new participants. In plain terms: to make ESMA the sketch of a single markets supervisor, on the model of what the ECB has become for the large banks.

That is where the mechanism jams, because a single market for capital requires single rules and a single referee, and Europe has neither. An investor lending to a company in another country faces a foreign insolvency law, a foreign tax code and a national supervisor that is not their own. These twenty-seven regimes are not technical details: they are the reason a German pension fund prefers US Treasuries, liquid and under a single law, to the bonds of a Portuguese SME. As long as defaulting in Lisbon, Milan or Warsaw does not obey the same rules, cross-border capital stays expensive and scarce.

Yet these three locks fall under the competences member states defend most jealously. Taxation requires unanimity. Insolvency law touches the heart of national legal orders. And handing supervision to Brussels means dismantling national authorities that employ, that regulate their champions and that weigh in the domestic game. Unsurprisingly, the shift towards a European-level supervised model runs into resistance from national regulators and from the players who thrive in the current fragmented system. Every financial centre, from Frankfurt to Paris to Amsterdam, wants integration provided the centre of gravity sits at home. It is the calculation that sank the Capital Markets Union for ten years, and nothing suggests it has changed.

The Commission knows it, which is why it has swapped persuasion for pressure. Its 30 April 2026 message, “from strategy to delivery: member states must now act”, is a polite but firm reminder that Brussels has done its part and the blockage now sits in the capitals. Commissioner Albuquerque kept up the pressure all summer, continuing in July 2026 her dialogue with the academic community on implementation, and is aiming for agreement on the remaining texts by the end of 2026. The timetable is achievable. The political will of the Twenty-Seven remains the unknown.

There is, finally, an objection from the left of the chamber that it would be dishonest to ignore. Pushing households to convert their deposits into market investments also transfers to them a risk they did not carry. A parliamentary question tabled in 2026 worries explicitly about the project’s impact on public social security systems: by over-praising funded pensions, does one not weaken pay-as-you-go pensions? The cautious saver one wants to turn into an investor will also discover volatility. The line between financial empowerment and risk transfer is thin.

The other reading: what if incrementalism is enough

The dark scenario is easy to write: without single supervision or tax harmonisation, the SIU would be mere packaging, the third disappointment after two Capital Markets Union plans. That reading is solid, but it deserves its counterpoints, because it assumes there is no reform except through the institutional big bang. European history often says the opposite.

First, the securitisation lever depends on no unanimity. It is a prudential rules adjustment, adoptable by majority, and its effect on banks’ lending capacity is mechanical. If it revives even a fraction of Europe’s long-atrophied securitised credit market, it will have circulated capital without any state ceding an inch of sovereignty. The same reasoning applies to the 28th regime: an optional status asks no one to abandon national law, it adds a parallel lane companies will take if it is better. Integration by opt-in bypasses the blockage instead of confronting it.

Second, the €300 billion leak deserves perspective. That part of European savings finances US assets is not in itself a pathology: it is diversification, and a repatriated return remains income for the continent’s saver. The problem is not that Europe invests abroad, it is that it does not offer at home vehicles deep and liquid enough to retain a share of that flow. Yet that depth is being built, and it is already being built: the expanding pool of common European debt, the end of Bund scarcity that widens the continent’s bond base and the tokenisation projects driven by the ECB are manufacturing, without saying so, the deep reference asset that was missing. The SIU does not need to succeed at everything at once; it needs these bricks to converge.

Third, incrementalism has a virtue the big bang lacks: it advances when political will is missing. The banking union was built through crisis, piece by piece, never completed, and works all the same. Europe will probably not build the savings union in one legislature nor by a treaty. It will build it, if it builds it, by sedimentation, a standardised savings account here, a unified company status there, a supervisor gaining one power at a time. It is not glorious. It may be the only method that works at twenty-seven.

There remains the question that will decide everything, and to which neither Draghi nor the Commission can answer in the member states’ stead: does Europe truly want a unified capital market, with what it implies of a common supervisor and champions that cease to be national? As long as the answer stays ambiguous, ten trillion euros will keep sleeping, and the best action plan in the world will not wake them.

Rich savings, poorly put to work

The rebranding of an old project

What Brussels put on the table

The real lock: supervision, and the twenty-seven

The other reading: what if incrementalism is enough

Sources