The European Commission announced plans to attract a larger portion of European household savings, estimated at around 10 trillion euros, towards capital markets by urging member governments to establish investment accounts with tax privileges including deductions, exemptions, or deferrals, ensuring better tax treatment of financial assets.

Maria Luis Albuquerque, EU Commissioner for Financial Services, explained during a press conference in Brussels that providing citizens with incentives to invest their savings would direct more funds to European companies, supporting growth, innovation, and job creation.

This move is part of the “Capital Markets Union” initiative, which aims to link national capital pools and ensure European companies can raise necessary financing. Albuquerque added: “The EU does not lack capital; European households save 1.4 trillion euros annually compared to 800 billion euros in the United States – yet 300 billion euros of these European savings flow to markets outside the EU every year.”

The proposed Capital Markets Union seeks to address these lost opportunities by better directing savings into productive investments and unlocking the full potential of capital markets within the bloc for both companies and citizens.

The EU also relies on the European Investment Bank group and national promotional banks to attract private sector investors to participate in financing projects that support the bloc’s economic and political goals.