Finance Europe is a well-intentioned label but it misses the structural point

In June 2025, seven EU Member States (namely France, Spain, Luxembourg, the Netherlands, Estonia, Germany and Portugal) launched Finance Europe, a voluntary label for retail financial products that invest at least 70% of their portfolio in assets of the European Economic Area, which includes the EU, plus Iceland, Liechtenstein and Norway.

The initiative seeks to address a widely cited figure from last year’s Letta report – that  EUR 300 billion of European household savings are channelled abroad each year, largely to the US. The underlying assumption is that capital is fleeing the EU because of fragmented capital markets and that a common label would help to retain savings within Europe.

This initiative is politically appealing but economically flawed. Both the diagnosis and the proposed remedy rest on fragile foundations. Labelling savings products will not reverse macroeconomic realities, nor will it address the core problems affecting EU capital markets.

Judith Arnal is Senior Research Fellow at ECRI and CEPS. This commentary is based on a full analysis in Spanish for Fedea (Fundación de Estudios de Economía Aplicada), which can be found by clicking this link. This commentary was originally published by CEPS on October 14, 2025.