Capital markets for dummies : What exactly are EU leaders trying to do ?

politico.eu · Feb 20, 2026 · Collected from GDELT

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News Financial Services Watchdogs, a two-speed Europe and an exclusive “E6” club: It’s all here in your essential guide to understanding the hottest topic in Brussels. Copy Link Copied Share via email Share on X Share on WhatsApp Share on LinkedIn The leaders of countries including France, Germany and Italy, pictured at the informal leaders' retreat in Alden Beisen Feb. 12, 2026, have backed plans to sign up to initiatives in smaller groups. | Pool picture by Leon Neal /AFP via Getty Images February 19, 2026 7:47 pm CET If there’s a particular piece of EU jargon that’s been on everyone’s lips lately, it’s the “Savings and Investments Union.” Formally known as the Capital Markets Union, the heart of the project is to create a U.S.-style financial market to make the EU a more attractive place for companies to issue stock and attract investors. But vying national interests have plagued the project since its inception over a decade ago. Frustration over the lack of progress has begun to boil over, as cash-strapped countries look to encourage EU citizens to invest some €11 trillion in cash savings in their bank accounts and turbocharge the economy. To break the deadlock, some countries are advocating a two-speed Europe that would allow smaller clusters of countries to integrate their financial markets without the burden of the laggards. Here's your essential guide to understanding the hype around SIU: SIU is nothing new — but political support for it is The aim of forging a single market for investment in the EU goes back as far as 1958. In theory, it should be as important as a common currency or a single market for goods in the bloc. But it’s always proved far trickier to achieve. The “capital markets union” emerged under former European Commission President Jean-Claude Juncker in 2014, with London planned as the financial heart of the project. Brexit might have ruined his plans by knocking out the EU's key finance center, but the plan was always relatively low-ambition, focusing on technical tweaks to make it easier for financiers to operate across 27 markets rather than major political changes. That changed in 2024, when Commission President Ursula von der Leyen made the CMU a top priority on the advice of former Italian prime ministers Mario Draghi and Enrico Letta. Both men warned that the EU would never be able to keep pace with the U.S. and China without deeper financial markets. So the CMU got a facelift, and the Savings and Investments Union was born. The centerpiece of the rebranding effort is the creation of a single watchdog for the bloc's largest financial plumbing firms, as well as measures to boost bank financing. Why is it taking so long? Most of the major initiatives to achieve a unified market involve political sacrifices for EU countries. A single market would ideally have unified rules and supervision for finance firms across the EU’s 27 countries, but there’s the problem: Governments are slow to change their national rules, some of which date back hundreds of years, and to cede oversight of their finance industries to the EU level, meaning proposed rules often get watered down in negotiations. France is the biggest supporter of this plan, but many smaller countries, or those that depend on their thriving investment sectors, such as Ireland and Luxembourg, are fiercely against it. Asset managers and stock exchanges have also lobbied against EU supervision, partly because they are protected as national champions when they’re supervised by their home countries. As for fostering an investment culture in the bloc, many Europeans aren’t very interested in, or don’t understand, investing in products like stocks and bonds. Compared to the U.S., where people tend to know they need to invest to provide for themselves in retirement, many people in the EU expect state-funded pensions to provide their income in old age. The “capital markets union” emerged under former European Commission President Jean-Claude Juncker in 2014, with London planned as the financial heart of the project. | Thierry Monasse/Getty Images What is the EU doing now? The Commission has put forward multiple initiatives over the last year to boost an investment culture in the bloc. On banking it proposed a plan to boost the reselling of debt by banks, known as “securitization,” and will publish a plan later this year on the competitiveness of the EU’s banking industry. For financial markets it has pushed EU countries to create simple investment accounts for their citizens, to boost financial literacy and to update pension systems. The Commission will in March also propose a “28th regime,” an EU-wide legal framework that will offer companies certain uniform rules to operate easily across the bloc. The plan for a single watchdog is the key one — and the hardest to agree. What's this talk of a two-speed Europe? EU countries are complaining that trying to agree on policies among 27 countries takes too long. The leaders of France, Germany, Italy and others have backed plans to peel off and sign up to initiatives in smaller groups. Von der Leyen is also onboard with the idea. At this month's informal leaders' retreat she said leaders “want to be done with phase one of the Savings and Investment Union, that includes the market integration, the supervision and the securitization, by June.” If there is not “sufficient progress” by then, she said, the EU will consider “enhanced cooperation,” where nine or more countries can make deals together. The finance ministers of France, Germany, Italy, the Netherlands, Spain and Poland are already on the case. In January they decided to create the “E6” group to speed up financial reform, raising concerns among smaller countries that their national interests could be bulldozed in the name of progress. It’s likely there will be more clarity on this approach after the next EU leaders' summit in March, where the SIU will be discussed. In the meantime, E6 countries are keeping up the pressure on their fellow finance ministers. France has pushed for the supervision proposal to be discussed at the ministerial level in March — a request that smaller countries oppose. “We want to make sure that we are the pacemakers,” said French Finance Minister Roland Lescure in defense of the E6. “Europe is very good at moving well, we also need to make it better at moving faster — and that’s what we’re gonna do.”