Policy Pulse S2E1:Policy Perspectives: SIU, Defence and How They Play Out in the European Council
-
March 26, 2026
-
Listen on Apple Podcasts | Listen on Spotify
Introduction
Competitiveness, security and financial integration are becoming increasingly interconnected in EU policymaking. Recorded shortly after the European Council meeting on March 20, 2025, in this episode of EU Policy Pulse (Season 2 Episode 1), host Carolyn Green speaks with Hans Hack, Senior Managing Director and Head of Brussels, Robin Jezek, Senior Advisor in Financial Services, and Beatriz Cózar-Murillo, Senior Director in the Defence and Aerospace practice. Their conversation covers the evolving Savings and Investments Union, defence industrial policy and the growing role of coalitions of member states in shaping EU action.
To begin, Hans, could you set the scene for us? What was the broader context of this European Council meeting?
Hans: The meeting was initially intended to launch the next phase of the EU’s competitiveness agenda, which is a central priority for the current Commission. However, geopolitical developments reshaped the discussion, particularly the war in Iran and its impact on energy prices.
As a result, leaders focused not only on competitiveness, but also on energy security, economic resilience and broader geopolitical challenges. While there were limited concrete outcomes, the discussions highlighted both short-term measures to address energy prices and longer-term considerations around energy security.
We are hearing more about competitiveness and security together. Are these still separate policy areas?
Hans: Increasingly, they are interconnected. Security is no longer only about defence. It also includes economic and energy security.
The EU is attempting to develop a more holistic approach, but this is challenging given the diversity of perspectives across the 27 member states. Aligning priorities across defence, economic policy and social systems takes time, but the intention is clearly to move towards a more integrated framework.
Robin, turning to you, can you explain the current state of the Savings and Investments Union?
Robin: The Savings and Investments Union, or SIU, is a flagship initiative under the current Commission. It builds on earlier efforts such as the Capital Markets Union and the Banking Union, with the aim of improving how savings are channelled into investment across the EU.
The initiative focuses on several areas, including increasing retail participation, improving pension investment, enhancing market integration and strengthening the competitiveness of the banking sector.
A key recent development is the Commission’s proposal on the Markets Integration and Supervision Package. This aims to address fragmentation in EU capital markets by removing barriers and promoting greater scale and integration.
Has progress been consistent across member states?
Robin: There is strong political ambition at the highest level, but this is not always reflected in technical negotiations. Member states still have differing views, particularly on issues such as supervision.
We are also seeing the emergence of smaller coalitions of countries, such as the so-called E6, which are attempting to drive progress on specific aspects of the agenda. This raises questions about whether progress will happen at the EU level or through smaller groups moving ahead.
Does that mean the urgency around SIU is increasing?
Robin: Yes, significantly. Geopolitical developments have reinforced the importance of financial integration and competitiveness.
European leaders have explicitly called for progress on key elements of the SIU by the end of the year. However, the challenge remains how to balance speed, ambition and coherence across all member states.
Beatrice, turning to defence, how has the conversation evolved?
Beatrice: The focus has clearly shifted towards implementation. Following the war in Ukraine, there has been a rapid expansion of defence-related initiatives, including financing tools and industrial policy measures.
Now, the priority is to translate these initiatives into concrete actions. This includes accelerating defence readiness, improving military mobility and launching joint procurement projects.
At the same time, discussions are taking place beyond the EU, particularly within NATO, where the focus is on capability targets and burden sharing.
Are we seeing more cooperation or more fragmentation in defence?
Beatrice: Both. The EU continues to act collectively in some areas, but we are also seeing a rise in smaller coalitions of member states working together on specific initiatives.
This is not new in defence, but it has become more visible and more structured. These coalitions can help accelerate progress, especially when there are differences in priorities across member states.
Hans, does this trend towards coalitions present risks?
Hans: It can. While cooperation among smaller groups can be useful, there is a risk of fragmentation if different groups move forward in different policy areas.
This could undermine the integrity of the internal market if not managed carefully. However, when used as a way to build momentum and encourage broader agreement, these coalitions can play a constructive role.
Before we close, what are each of you watching in the coming months?
Robin: Progress in the Council on the Markets Integration and Supervision Package will be key. We also need to watch how the European Parliament engages with the proposals in the second half of the year.
Beatrice: On defence, the focus will be on implementation, particularly ahead of the NATO summit in July. I will also be watching how EU initiatives translate into concrete projects and financing decisions.
Hans: I will be looking at whether high-level political commitments translate into detailed agreements at member state level. That alignment will be critical for progress.
Related Insights
Published
March 26, 2026
Key Contacts
Senior Managing Director, Head of Brussels
Senior Director