EU unveils plan to channel household savings into investments

By Mucahithan Avcioglu

ISTANBUL (AA) - The EU announced a new strategy that seeks to redirect EU's household savings into productive investments, according to a press release by the European Commission on Wednesday.

The new plan called "Savings and investments union" seeks to promote EU citizens' engagement in capital markets, nurturing their wealth and strengthening the EU economy through better financial literacy and a wider range of investment opportunities.

The statement emphasizes that about 70% of EU's household savings which are worth about €10 trillion ($10.89 trillion) are kept as bank deposits and they earn less than investments.

"The new strategy can support EU citizens in building their household wealth and saving better for the future," it said.

The strategy will provide better opportunities to those who wish to invest their savings.

"This means having easy, simple and low-cost access to a wide variety of investment opportunities," it noted.

A financing ecosystem will be established to support investments toward the EU's strategic objectives.

The role of bank deposits and savings in the EU economy will also be strengthened with this plan.

A greater share of savings will be channeled into capital market instruments to stimulate investment, especially in critical sectors.

The European Commission will launch initiatives aimed at improving access to capital for all businesses and develop a scheme for investors, including savings, investment accounts or various products.

Under the strategy, investment accounts will also receive various tax advantages.

Banks investing in areas supported by appropriate regulatory schemes will benefit from preferential treatment in the calculation of capital requirements.