Brussels – The Savings and Investment Union, which is expected to be proposed by the end of 2025, will have to address a dilemma that has long been troubling Brussels policymakers: “How to convince European savers to invest in European companies?” Incentives, European guarantees, a single supervision for all member states: ideas that the Commission has put on the table, but which risk being rendered meaningless if the “zero risk” culture that became dominant after the 2008 and 2012 crises does not change.
We are not talking about pocket money, but 10 trillion euros sitting idle in citizens’ bank accounts, capital that could provide the boost the EU is desperately looking for to relaunch the competitiveness of the old continent. Representatives of European institutions and
industry professionals discussed how to make this money circulate at the Connact Finance & Insurance event entitled “The EU Plan to Invest Europeans’ Savings in European Companies.”
The ball is still in the court of the Commission, which has opened a public consultation – until June 10 – to receive valid input for drafting the legislative proposal. In particular, the file on the table of the EU Commissioner for Financial Services, Maria Luís Albuquerque. Lauro Panella, a member of the Cabinet of the Portuguese Commissioner, starts from a fundamental premise in the financial world: “If we want to accept the idea that this continent invests in risk, we must accept the idea of a loss.” A loss “that cannot be passed onto the public budget.”
European financial culture is different from the one overseas: “We must seek a European way, not just take the US as an example,” Panella argues, where risk is understood very differently and permeates the everyday life of citizens. Suffice it to say, Panella recalls, “that we live on the only continent on the planet with public pensions, public healthcare, and public schools.”
As Giovanni Crosetto, MEP for Fratelli d’Italia, points out, “a cultural shift is needed” to overcome the fear of risk, which must begin with “financial education starting in schools.” From a regulatory point of view, we must put the last 15 years of zero risk for banks, intermediaries, and investors behind us.
However, even when they do decide to invest in companies, Europeans invest only 15 percent of their total in Europe, and 85 percent abroad. Especially in the United States, where, instead, 75 percent of Americans invest at home since, according to Panella, American companies are “more productive.” Five Star Movement (M5S) MEP Gaetano Pedullà adds that “investors go where there are higher returns” and “investing there yields greater remuneration.”
For the M5S MEP, however, the starting assumption is another: “People in Italy and Europe no longer save because general working and economic conditions do not allow it,” he argues. Therefore, to increase the share of investment in European companies we first have to “broaden the base of savers.” The investment issue is inevitably linked to the Union’s multi-annual budget. In the pipeline is the one for 2028 to 2035: Giuseppe Lupo, MEP for the Democratic Party, warns that “from 2028, we have to start reimbursing the interests of the Next Generation EU.” A heavy burden that will drain “between 25 and 30 billion a year” from the budget unless substantial new own resources are introduced.
The other big topic is the harmonization of rules among the 27 member states and the possibility of making ESMA, the European Securities and Markets Authority, an actual supervisory body along the lines of the US SEC. “Are we willing to lose national sovereignty?” asks Pedullà. The question is political, admits Crosetto, according to whom “we need to touch this issue in a proper and sensitive way.”
They know it well at the Berlaymont (the headquarters of the European Commission). “Building a common supervision and a common European stock exchange will not be easy,” Panella confirms, emphasizing that the EU executive has “only the power of proposal.” Then, the ball will pass to the co-legislators, the Council of the European Union, and the European Parliament, who must make the tough choices. In the immediate future, however, the Commission has a card to play to bring the member states into line: the recommendations for the European semester, scheduled for June 4, when Brussels will certainly try to steer the capitals’ reforms towards the objectives of the future Savings and Investment Union, Panella said.
English version by the Translation Service of Withub
