Europe is sitting on a mountain of cash. The problem is, most of it is doing almost nothing.

At the Reuters Next event in London on June 16, leading investors and policymakers made a forceful case for the European Union to mobilize roughly €35 trillion ($40.7 trillion) in private savings to finance the bloc’s economic transformation. The core argument: Europe cannot compete with the US and China while its citizens’ wealth languishes in low-yield bank deposits.

To put that figure in perspective, €35 trillion is roughly three times the combined GDP of Germany and France. And roughly €10 trillion of that sits in bank deposits that barely keep pace with inflation, let alone fund the infrastructure, green energy, and digital innovation Europe desperately needs.

The savings drain problem

A 2024 report by former Italian Prime Minister Enrico Letta laid out the uncomfortable math: approximately €33 trillion in EU household savings remain largely stagnant in deposits. Worse, an estimated €300 billion flows out of European markets and into US investments every single year.

The EU faces an estimated annual investment gap of €750 to €800 billion to meet its goals in competitiveness, digitalization, and climate transition. Some analyses push that figure as high as €1.4 trillion.

From Capital Markets Union to Savings and Investments Union

The Capital Markets Union (CMU) has been an EU policy ambition for over a decade, aiming to create a single market for capital across all member states. The initiative is now being rebranded as the Savings and Investments Union (SIU), a rhetorical shift that tells you something about where policymakers think the bottleneck actually is. The old framing focused on harmonizing markets. The new framing focuses on getting citizens’ money off the sidelines and into investments that matter.

The European Commission took a concrete step in March 2025, unveiling a plan specifically targeting the redirection of €10 trillion in citizen deposits into strategic investments. The details of that plan involve regulatory adjustments designed to make it easier, and more attractive, for European savers to invest in EU-based funds, infrastructure projects, and green bonds rather than parking cash in savings accounts.

What this means for investors

The sectors most likely to benefit are the ones Europe has identified as strategic priorities: green technology, digital infrastructure, defense, and advanced manufacturing.

The €300 billion annual outflow to US markets also highlights a fundamental attractiveness problem. European savers aren’t choosing US investments out of spite. They’re choosing them because US markets have historically offered better returns, deeper liquidity, and more innovative financial products.

Investors should watch for concrete regulatory proposals emerging from the SIU framework over the coming months, particularly around cross-border fund distribution, retail investment incentives, and pension portability.