Ireland to benefit from EU Savings and Investment Union

• Advancing the Savings and Investment Union, including completing the Banking Union, and establishing a common fiscal capacity are essential to EU competitiveness

Ibec, Ireland’s leading business group, has published a new policy brief advocating for the advancement of the Savings and Investment Union, completion of the Banking Union, and establishment of a common fiscal capacity, which are vital for a more competitive and resilient European economy in the face of global challenges.

Despite concerns expressed about the impact on smaller countries such as Ireland, the paper argues that Ireland stands to benefit greatly from the Commission’s plan, with greater access to finance for both consumers and business. A Communication on the Savings and Investment Union is expected from the Commission on 19th March, which follows on from the Mario Draghi report on the future of EU competitiveness.

Neil Willoughby, Head of EU Policy at Ibec, said:

"The EU faces several challenges, including fragmented capital flows, an underdeveloped banking sector, and limited fiscal capacity, which hinder productivity. Addressing these through the new savings and investment union is key to unlocking investments that will boost Europe’s productivity and competitiveness.

For the European Commission to recognise a true Single Market for money, bold actions are needed. We must remove barriers to financial integration, complete the Banking Union, and unlock Europe’s fiscal potential. A more competitive European economy offers significant opportunities for Ireland’s businesses and consumers, including increased funding for domestic investment and higher returns for Irish savers. A more efficient Banking Union will also create new opportunities for both customers and Irish providers.

Furthermore, by leveraging Europe’s fiscal potential, we can also drive industrial policy, particularly in areas such as energy.”

Key Policy Recommendations

Ibec outlines four pivotal areas for reform:

1. Establishing a Homogeneous Market for Capital
   Remove regulatory, taxation, and fee-related barriers to cross-border investments.
   Develop pan-European investment products to stimulate greater financial integration.
2. Completing the European Banking Union
   Introduce a common European Deposit Insurance Scheme.
   Diversify sovereign bond exposures among European banks.
   Reform regulatory risk classification to revive securitization activities.
   Enhance banking oversight under the European Central Bank.
3. Establishing Common Fiscal Capacity
   Enable shared debt mechanisms to finance cross-border public goods, including infrastructure, energy, and skills development.
   Set an annual investment target to anchor public investment planning.
   Create automatic public investment stabilizers to sustain economic activity during downturns.
4. Preserving Free and Fair Competition
   Foster the scaling of domestic European firms by removing intra-market regulatory barriers.
   Oppose the creation of market-dominant ‘European Champions’ to uphold competition rules.
   Ensure public funding is allocated equitably across sectors through sectoral-indexed grants.
   
   

In the latest episode of our Ibec Responds podcast, Neil Willoughby was joined by Mourad Mejdi, Ibec Economist, to discuss our policy brief in detail.