The uses of the word idle

Posted on: 7 September 2026

The passage sits in the middle of a long speech on competitiveness delivered to the Medef, the French employers' federation, and it takes about fifteen seconds to say. Europe has savings. Unfortunately those savings are sitting idle. Ten trillion euros of household money is held in bank accounts, a large share of European savings is invested outside the continent, and Europe now needs to put those savings to work for its companies. There follows the machinery: proposals on securitisation, on bank and insurance investments, on the integration and supervision of markets, worth up to 470 billion euros of additional investment. Then a deadline of the end of the year, and a line that has gone almost entirely unreported, which is that the agreement will ideally be reached with all twenty-seven member states but if that does not work it will be done with those that are ready.

Continental commentary has spent the following week arguing about whether this constitutes a raid on private savings. It does not, and the argument is a distraction from something more interesting, which is that a British reader has heard all of this before and knows roughly how it ends.

The Mansion House Accord was signed on 13 May 2025 by seventeen of the largest defined contribution providers, between them holding something close to ninety per cent of active savers' DC pensions. The signatories committed to putting ten per cent of their main default funds into private markets by 2030, with at least half of that going into British assets. It built on the Mansion House Compact of 2023, which had asked for five per cent. The Pension Schemes Bill that followed carried a reserve power allowing government to mandate those allocations if the voluntary route failed, and it is worth remembering how that went. The Lords voted to strip the power out of the Bill by 213 votes to 13. The government did not remove it but capped it, amending the legislation so the power could never require more than the Accord's own ten and five per cent, and the pensions minister told an industry conference that the state was not going into the business of taking fiduciary decisions.

Then last November the Chancellor did in an afternoon what Brussels is asking twenty-seven governments to agree by Christmas. From April 2027 the cash ISA allowance for savers under sixty-five falls from twenty thousand pounds to twelve, with the balance of the allowance available only through stocks and shares. Those over sixty-five keep the full cash allowance, on the reasoning that investing suits people with time ahead of them. Around three hundred billion pounds currently sits in cash ISAs. The share prices of the investment platforms moved on the announcement, which tells you who reads a Budget most attentively. A twenty-two per cent charge on interest earned by cash held inside stocks and shares ISAs is expected to follow from the same date, along with a ban on transfers back into cash, the anti-circumvention apparatus that any tax change of this kind eventually requires.

So the vocabulary travels, and Britain got there first because Britain could. That is the first thing worth noticing about von der Leyen's speech, and it is a point about constitutional plumbing rather than intentions. A chancellor with a majority can reprice a savings product between one Wednesday and the next. A Commission president has to assemble unanimity across twenty-seven finance ministries, several of which host financial centres with a direct interest in the status quo, which is why the capital markets union has been under construction since Jonathan Hill's action plan of September 2015 and has been relaunched twice without arriving anywhere. Renaming it the savings and investment union in March 2025 changed the audience being addressed rather than the substance. The securitisation package followed in June of the same year.

This matters because of what has been happening in the same weeks on an unrelated front. On 1 September the German government formally attributed to Russian services the explosive drone found on 4 August on the apron at Leipzig/Halle, feet from a Ukrainian cargo aircraft, and closed the Russian consulate in Bonn with effect from 18 September. Hybrid warfare, said the interior minister, while taking care to add that Germany is not at war. It has taken very little time for a reading to circulate in which the alarm over external threat is being staged to soften Europeans up for the cost of rearmament, savings included. The chronology does not support it, and the speech itself is the strongest evidence against it, because defence does not appear in the passage at all. The money is asked for in the name of scaling up European companies, and the sentence immediately before it says that this will not be financed from the public purse alone.

What the security climate does affect is the price of a veto. A reform that has died twice on unanimity and on the reluctance of member states to give up supervision of their own markets finds in an external threat the one lever capable of loosening a national position. No coordination is required for this. It is enough that urgency lowers the political cost of a concession that would never have been made in calmer conditions, and the tell is not the rhetoric about hybrid attacks but the willingness to proceed with a coalition of the ready. On financial supervision that is a substantial admission.

Which leaves the adjective. Idle is technically false, and not in a pedantic way. Deposits are not sitting anywhere. They are the funding side of a bank balance sheet, the liability against which the lending is written, and every pound in a current account in Leeds or a euro in one in Lille is already inside somebody's mortgage or somebody's working capital facility. Double entry bookkeeping has been explaining this since the fifteenth century. To call that money idle is to say one thing only, which is that it is being intermediated by banks rather than by capital markets. The proposal shifts the channel. It does not activate inert capital, because there is no inert capital.

The underlying problem is nevertheless real, and anyone who has watched a mid-sized European company try to raise growth capital knows it. Piero Cipollone of the ECB has pointed out that Europe runs thirty-one central securities depositories and three hundred and twenty-three trading venues, which is a courteous way of saying that the single market in capital has never been single. A company listing in Milan and one listing in Frankfurt inhabit different administrative worlds. The cost of that fragmentation is borne by firms trying to grow, and the moment they stop bearing it is usually the moment they sell to an American buyer.

The first instrument in the package, though, is securitisation, and here I am returning to a mechanism I wrote about in June in connection with British equity release. The point then concerned a single product. The point now is that the same machine is being proposed as continental infrastructure. Securitisation frees regulatory capital on bank balance sheets by moving risk to whoever buys the tranches, and in Europe the natural buyers of those tranches are insurers and pension funds. Which is to say the same household savings, one step further along, with the difference that a deposit carries a guarantee and a junior tranche carries nothing.

The arithmetic is the least discussed part of all this and the most eloquent. The strategic investment shortfall identified by the Draghi report, and adopted by the Commission as its own working figure, runs at 750 to 800 billion euros a year. The 470 billion is not annual. It is the total the entire operation is meant to unlock, so even on flawless execution, and no European financial reform has ever executed flawlessly, it covers a little over half of one year's gap. A savings union on those numbers is not the answer to the financing problem. It is the ground being prepared for common borrowing, which appears in the same speech dressed as the next multiannual budget, described there as the financing arm of European independence.

There is a British complication in this that Brussels does not have to think about and Westminster increasingly does. If domestic savings are steered towards productive assets and away from cash and gilts, somebody still has to buy the government's debt, and the Debt Management Office has spent two decades relying on exactly the institutions now being asked to reallocate. The pension funds cannot simultaneously be the buyer of last resort for gilts and the venture capital of the British economy.

The thing to watch is narrow and it will resolve itself by Christmas. If the savings and investment union is agreed at twenty-seven, the reading offered here about the price of a veto is wrong and I will say so. If it passes with a coalition of the willing, or fails and returns in the spring with a defence package attached to it, then the lever was the one described.