EU capital markets deal: Ireland sees year-end accord

About 80 per cent of the political ground for an EU capital-markets accord is already in place, Irish Taoiseach Micheál Martin told the Financial Times on Monday, arguing the bloc could still reach a deal by year-end. Ireland would then use its second-half 2026 EU presidency to push a project investors have long treated as important, and usually unfinished.

The calendar matters. A file that has drifted through Brussels for years would have a presidency, a deadline and a head of government publicly attached to it.

Brussels now frames the issue as more than a slogan about integration. The Commission describes the savings and investments union as a way to give households better returns and make it easier for companies to raise equity and debt across borders. Martin’s case is that pressure from the US and China has turned that ambition into a financing question Europe can no longer defer.

Martin said there was “about 80 per cent” agreement around the package and that there were “ways of landing this”. The remaining dispute is less about whether deeper capital markets are desirable than about how much sovereignty capitals will surrender to get them. For investors, that is the distance between another summit line and a timetable attached to policy change.

The funding arithmetic explains the urgency. According to Financial Times analysis, banks still account for 85 per cent of corporate lending in Europe, leaving the region far more dependent on bank balance sheets than the US. RTE reported in February that about €11 trillion of household savings sits in deposits and similar low-yield products rather than being channelled into long-term investment.

That imbalance matters more than the branding. A system that keeps savings local and lending bank-heavy can function in calm periods, but it is less flexible when companies need larger pools of risk capital, cross-border bond demand or non-bank funding channels. Ireland’s presidency will test whether broad political consensus can become rules that change where European money goes.

Supervision remains the hard part. Most member states appear to accept the need for deeper integration, but the load-bearing argument is over who oversees key institutions once markets are tied together more tightly. Smaller countries can support the end goal while resisting any design that shifts regulatory authority upward too quickly, especially if they fear activity migrating away from domestic centres.

Bloomberg reported in May that the EU’s six largest economies had aligned behind a plan to restart the effort after years of drift. Earlier attempts to build a capital-markets union stalled on tax, pension and supervisory differences, even when governments agreed in principle that Europe needed deeper funding markets. Ireland’s year-end pitch adds political ownership to a file that usually floats between communiques.

What changes if it lands

Issuers would gain broader access to bond, equity and securitised funding instead of leaning so heavily on domestic bank credit. Savers would get more routes into market-based returns rather than leaving cash parked in deposits.

On the European Commission’s own account, a stronger savings-and-investments union should connect household money to productive investment more efficiently across the bloc. In Dublin, industry groups have made a similar point from the domestic side. Brian Hayes, chief executive of Banking & Payments Federation Ireland, told RTE it was “vital that Ireland also examines what we can do at home”, a reminder that Brussels-level reform will not do all the work.

National governments still need retail-investment products, tax treatment and listing environments that make capital markets less cumbersome for households and issuers. If the final 20 per cent of the package proves negotiable, Europe could move a long-stalled financing reform into law during Ireland’s presidency. Failure would leave the bloc with the same problem Martin identified: plenty of savings, too little market depth and an economy still more reliant on banks than its global rivals.