The European Commission is making a big push to get the proposed EU Savings and Investment Union (SIU) over the line as soon as possible. The Government should support the initiative despite some concerns that it could undermine the attractiveness of the IFSC.
Moves to make the EU economy more competitive and resilient have taken on a new urgency given the breach in transatlantic relations and US president Donald Trump’s threats of tariffs and sanctions. The report on the European economy written by Mario Draghi, the former president of the European Central Bank, in 2024 cited an SIU as one of the major policy levers needed to achieve this.
The European Commission estimates there is €11 trillion held in savings accounts across member states, while there is an annual funding gap of up to €800 billion needed for investment in the digital economy, the green transition and defence spending. The objective of the SIU is to channel these savings into the EU economy.
Proposals for an SIU, originally known as the Capital Markets Union, have been around since 2015, but vested interests among member states have prevented the initiative from passing into legislation.
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An SIU would require a centralised regulatory authority, which would mean each member state would have to surrender existing regulatory authority to the European Securities and Markets Authority (ESMA) in Paris. The Government has long held concerns that this loss of regulatory autonomy would undermine Ireland’s ability to attract future investment in financial services.
But the overall effect is likely to be limited, whereas the potential upside from a well-functioning SIU would have enormous benefits for both the EU and Ireland.
Taoiseach Micheál Martin said the Government would support the SIU notwithstanding concerns about its impact on the IFSC. The Government must follow through on its support for an SIU and not cave in, once again, to narrow sectoral interests.
