SIU builds on the CMU framework in four fundamental ways.
First, the regulatory approach. The Commission now prioritizes “legislative measures, in the form of regulations rather than directives” and proposes “a 28th legal regime”13 through the European Innovation Act14 to bridge differences in corporate, insolvency, labor and tax law. This shift acknowledges that directives’ minimum standards approach model allowed national “gold-plating,” undermining genuine market integration.
Second, the implementation strategy. The SIU adopts a phased approach, focusing initially on politically feasible initiatives such as securitization while deferring more contentious issues most notably consolidated supervision that repeatedly stalled the CMU. A mid-term review scheduled for Q2 2027 will evaluate progress and may provide the political momentum needed to tackle remaining obstacles.
Third, a holistic financial-system framework. Unlike the CMU’s siloed, sectoral approach, the SIU recognizes the interdependence of banking and capital markets. Previous attempts to integrate fund distribution or strengthen cross-border financing have faltered because they have failed to address constraints in the banking system and other adjacent infrastructures.
Fourth, the political urgency. Spurred by the Draghi Report’s warning of Europe’s “existential risk” without significantly higher investment, the SIU reflects a new geopolitical context. The Ukraine war, escalating US-China tensions, and Europe’s pursuit of strategic autonomy all “accelerate the push for strategic autonomy, where the EU seeks to reduce its dependence on other regions for critical resources, including financial services”15. The SIU therefore seeks to address immediate survival needs: energy independence, defense capabilities, and technological competitiveness. According to Draghi, at present, Europe will require an additional €750-800 billion annually by 2030 to address these climate changes, technological shifts, and geopolitical challenges.