Multi-country initiatives could help move SIU goals forward, says OECD

Multi-country initiatives could enhance EU market integration in areas such as taxation, where EU legislation has limited reach, the OECD has said, suggesting they could help break a deadlock with regard to the development of EU-wide savings and investment vehicles.

“EU countries can coordinate their actions to help advance the creation of a Savings and Investments Union, complementing EU-level initiatives,” the group said in its latest EU and Euro Area Economic Survey report.

“While in most EU countries, private pensions and owner-occupied residential property benefit from lower marginal effective tax rates, taxation on other forms of savings follows different approaches.”

The Savings and Investment Union (SIU) is the European Commission’s strategy for shifting excessive EU household savings into more productive investments.

Its first legislative initiative under the SIU was a package of securitisation reform proposals put forward in mid-June. Proposals regarding the PEPP framework and the bloc’s pension fund legislation, the IORP II Directive, are expected later this year following consultations.

In its report, the OECD said that preferential tax treatment of national bank savings products still posed “a formidable challenge” to the development of EU-wide savings and investment products.

It cited the PEPP in this context, and said that “[o]ne way forward would be for a group of countries to test harmonised taxation rules for long-term investment products”.

An example of this, according to the OECD, is the launch of the European Competitiveness Laboratory in March 2025 by Spain and six other EU countries (Estonia, France, Germany, Luxembourg, the Netherlands, and Portugal).

In June, those same countries announced the launch of a new marketing label, ‘Finance Europe’ for savings products that target European investments.

The OECD also said that cost-benefit analysis of investment tax frameworks by the European Commission would be “useful and relatively inexpensive”.

In its SIU strategy, the European Commission indicated that it would be using the European Semester process to advocate for pension reforms, a plan that was welcomed by PensionsEurope, the umbrella association for national pension fund bodies in the EU.

The OECD said such an exercise could draw on the successful experiences in countries that offer tax incentives for retail investment, including tax deductions for private pension savings, such as in Denmark and Sweden.

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