A decade after launching its capital markets union project, the European Union still struggles to convince households to shift their savings out of stagnant cash holdings and into investments that would fuel growth across the bloc. Despite more than 60 legislative proposals since 2015, the EU continues to lose an estimated €300 billion annually to foreign markets mainly the U.S. due to fragmented rules and risk-averse savers.
With a new package expected this week, Brussels hopes to revive its Savings and Investments Union (SIU), but political divisions and weak public trust remain major obstacles.

Why It Matters

A deeply underdeveloped investment culture in Europe is holding back growth, weakening capital formation, and undermining the EU’s long-term competitiveness versus the U.S. and China.
Household cash piles reached €12.1 trillion, equal to nearly 30% of wealth double the U.S. share.
If Europeans invested even a fraction more in equities or long-term funds, the EU could finance innovation, climate transition and industrial competitiveness without relying on foreign capital.

Key Obstacles to Market Integration

Fragmentation: 27 different regulatory systems make cross-border investing costly and complex.

Politics: National interests frequently override EU-wide ambitions.

Low returns: European deposits often yield below inflation yet savers still prefer them.

Bureaucracy: Complex initiatives such as the Retail Investment Strategy (RIS) have stalled or become outdated.

Trust deficit: High fees, past scandals and opaque advice discourage investors.

An ECB study earlier this year highlighted that technical complexity and political bargaining have slowed progress more than any market weakness.

What Countries Are Doing Individually

With EU reforms stalling, several countries are moving on their own:

1. Spain-led “Finance Europe” label
Seven countries are testing a new label to help savers identify products that channel funds into EU companies.
However, the pilot is moving slower than expected; Madrid may not announce results until 2026.

2. Italy’s PIR model as an EU blueprint
Italy’s Savings Investment Plan (PIR) successfully directed €21 billion into domestic companies from 2017–2022.
Analysts say it could be scaled to EU level with rules requiring a majority of assets to support European firms.
“Instead of 70% in one economy, it would be the EU economy,” said Fabrizio Pagani, architect of the PIR.

3. More powers to ESMA
The European Commission is expected to propose stronger supervisory powers for the European Securities and Markets Authority to cut cross-border barriers for funds and platforms.

Cultural Barriers: Europe’s Deep Risk Aversion

Even with reforms, Europe faces a psychological challenge.

Germans hold 40% of their financial assets in cash or deposits, while Americans keep just 11% in cash.
Aging populations and memories of past financial crises have bred caution.

As one Dutch regulator put it:“The lack of trust is linked to biased advice or high fees.”

A 73-year-old Italian retiree captured the sentiment: “To invest your life’s savings, you must be either very savvy or fully confident in who invests for you. I am neither.”

With information from Reuters.