The efforts to establish a Capital Markets Union have a long history. The idea was launched by the EU Commission in 2014. In the years since, several action plans and legislative as well as non-legislative acts have followed, but there is still a long way to go before a ”completed” Capital Markets Union. For example, major obstacles include different insolvency regulations and fragmented supervision. On 19 March 2025, the Commission published a communication to relaunch the project. The aim is to integrate the fragmented EU capital market. This should give European companies improved access to private capital, which in turn should promote investment, competitiveness and economic development.

Reviving the Capital Markets Union
The Savings and Investment Union (SIU)'s “new” strategy wants to focus on market integration and citizen orientation. The creation of an SIU should be understood as a joint responsibility of EU institutions and member states. Twenty-two initiatives have been proposed for the next two years, which are divided into four core areas.

Firstly, citizens should be given more opportunities to invest their income and savings profitably in the capital market, in particular in the area of retirement planning. In addition to occupational retirement provision (IORPs), so-called pan-European Personal Pension Product (PEPP) are on the EU Commission's agenda. The aim of PEPP is to encourage private saving for retirement on the one hand, and to create a pool of capital that is available for private investment on the other.

Another issue is facilitating access to financing, particularly for small and medium-sized enterprises. Additional initiatives are to be taken and in particular investment in critical sectors is to be encouraged. Private equity  and venture capital are to play an important role. A corresponding legislative proposal is to be presented in the third quarter.

In order to efficiently implement the first two objectives, the Savings and Investment Union also aims to reduce regulation. Cross-border transactions should be facilitated to help companies to expand and plan better. In addition, the EU Commission intends to take measures to ensure that financial market players face a level playing field, regardless of their location. This requires, among, a more uniform application of supervisory rules and the transfer of supervisory powers from national to EU level. However, it has not been specified which areas are to be subject to centralised supervision.

The SIU is also intended to further expand the Banking Union. In this context, the aim is to revive the market for securitisation. That involves banks ‘packaging’ loans into securities, which are then sold to investors along with the default risk. This type of security contributed significantly to the 2008 financial crisis.

Critical voices
In a statement, the European Trade Union Confederation (ETUC) emphasises that while an SIU could solve specific funding problems in certain sectors, such as start-ups, this would, however not address significant barriers to private investment, such as economic uncertainty and high energy costs. ETUC emphasises the importance of public investment in achieving social and environmental goals and thus calls for fair taxation. In a report, Finance Watch concludes that in the best-case scenario a third of the necessary investment can be financed through capital markets. The remaining two-thirds must be generated by the public sector.

During a discussion with EU Commissioner Maria Luís Albuquerque in the ECON Committee of the EU Parliament,  the majority of MEPs welcomed the strategy paper. But, also criticism was expressed. Evelyn Regner, Member of the EU Parliament, summarised: “We must not allow the kind of financial market deregulation that is currently being discussed – we learned the hard way in 2008 what that can lead to. However, it is crucial that the steps towards a savings and investment union are not implemented without democratic legitimation.” (translation by AK EUROPA)

AK will not write a blank cheque for a Capital Markets Union
From AK’s point of view, protecting the interests of private small investors and employees, as well as financial market stability, should not be subordinated to private capital interests under any circumstances. It is also questionable whether the goal of integrating the nationally fragmented capital markets can be achieved without greater harmonisation of regulation and centralisation of supervision.

Measures that are designed to motivate savers to make risky investments and to buy pension products are viewed particularly critically. After all, the public pay-as-you-go system has proven to be a stabilising factor in crises and should therefore be given priority. AK is also opposed to the promotion of securitisation. Rather, gaps in regulation should be closed. Finally, even a ”complete” Capital Markets Union cannot replace necessary public investment.

Outlook
The member states welcome the objectives of the SIU. However, there is still disagreement among member states with regard to individual elements, particularly with regard to a shift of supervisory competences to the EU level, which in particular France and the Netherlands are advocating. The proposed measures are to be further developed in a regular dialogue by the end of 2025. A mid-term review is to be published in the second quarter of 2027.

Further information:
AK EUROPA: About the Capital Markets Union. A conversation with Finance Watch’s chief economist Thierry Philipponnat
AK EUROPA: Meeting the EU´s investment needs. A conversation with Finance Watch’s chief economist Thierry Philipponnat – part 2
AK EUROPA: The EU has an enormous need for investment. How is it to be financed?
A&W-Blog: Kapitalmarktunion – die eierlegende Wollmilchsau? (only German)
EU Commission: Questions and answers on the Savings and Investments Union
Euractiv: CMU: Everything you always wanted to know but were afraid to ask