Financial Investments of Europeans: Capacities to (Re)direct

On March 19, the European Commission published a communication regardin g t he Savings and Investments Union (SIU) , a strategic initiative aimed at enhancing European economic resilience through optim al allocation of domestic financial resources. This approach addresses a structural paradox: directs a substantial share of European private savings goes to non-European financial markets, particularly the United States. Th ese funds amount to approximately 300 billion euros annually, according to the Draghi Report based on the estimates from the European Commission. The Savings and Investments Union ( SIU ) aims to reverse this trend by reallocating European savings toward productive investments within the Union. In this report, we present some stylized facts that characterize the dynamics of household savings and investments within the European Union. The financial balance sheet of households appears robust, with a stable ratio of financial assets to GDP at 217% from 2022 to 2024. European households' financial assets reached 37 .3 trillion euros in 2023 and are projected to rise up to 38 .8 trillion euros in 2024, maintaining a solid growth trajectory. Meanwhile, household savings amounted to 1 . 3 8 and 1 . 58 trillion euros, with net financial investment flows of 751 and 980 billion euros, respectively. Nevertheless , the financial investment flows remain modest compared to those observed in the United States. Beyond the relative weakness of the flows, the structure of asset holdings also constitutes a barrier to the alignment between household investments and the financing needs of businesses, particularly in priority sectors. In particular, the share of deposits in household financial assets is notably high, exceeding 30% of assets, compared to 12% in the United States.