'The EU needs to invest more at home'
The European Union is the world's third-largest economy with one of the highest household saving rates, yet when our companies are scaling up, they often turn to financial markets abroad. Why? Because we export much of our vast savings, supporting innovation elsewhere, while many of our own start-ups struggle to access the necessary funding to grow.
The time has come for change and the EU needs to invest more at home. That is why seven European countries representing more than half of the EU economic output teamed up on Thursday, June 5, to channel these savings into investment in our continent's economy. Let's first consider the numbers.
In 2024, the EU economy generated €17.9 trillion in output. Wealth and value are therefore evidently created in Europe at a very large scale. Meanwhile, European households are some of the greatest savers in the world, setting aside about 13% of their income every year, five points more than American households. That represents €1 trillion of new private savings every year, much of which sits idle in cash or deposit accounts earning low returns. In total, this has created a pool of capital of €35 trillion over the years.
Meanwhile, Europe needs to invest at least 5% of its economy, or up to €800 billion a year, to close its technology and productivity gap with major competitors. Add new defense and security needs and that figure could easily surpass €1 trillion.
In this time of rising geopolitical tension and increasing barriers to trade and financial flows around the globe, these savings are a strategic asset for Europe that we must mobilize to help fill that investment shortfall.
Accelerating integration
Vital work is being done to improve the integration of our capital markets. The European Commission also put forward its strategy for a Savings and Investment Union in March. We want to thank Commissioner for Financial Services Maria Luis Albuquerque for her commitment and we will continue to work closely with her to enhance financial opportunities for EU households and businesses.
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