Spanish Households Lag Behind EU Averages in Capital Market Investment

Spanish households rank among the lowest investors in European capital markets, with an average of €31,039 per adult, 36% below the European Union average of €48,290, ara.cat reported.

The figures come from a study by the Association for Financial Markets in Europe (AFME), a body representing banks, brokers, and financial entities. The data highlights a stark contrast between Spain and nations with deeper investment traditions and higher living standards. Denmark leads with €116,334 per adult, followed by Sweden at €114,028 and the Netherlands at €113,248.

The AFME report underscores the need to boost household participation in European capital markets. This would mobilize savings into productive investment and strengthen Europe's strategic autonomy. The European investment account aims to stop a large portion of the continent's savings from financing U.S. companies and enhancing American competitiveness.

In Spain, however, the implementation of this new investment instrument is on hold. The regulation is pending approval by the Spanish government, which recently called a general election. A public consultation by the Ministry of Economy on this savings vehicle noted that several other countries already have similar products in place.

These include Denmark, Estonia, Finland, France, Hungary, Italy, Latvia, Lithuania, Poland, Slovenia, Slovakia, and Sweden, according to the ministry’s documents.

The problem of European savings flowing out of the continent is not new. A report by Mario Draghi on European competitiveness warned that much of the EU's household savings are diverted to U.S. financial markets rather than the European economy.

European Commission President Ursula von der Leyen has emphasized this point in her speeches, stating that each year, approximately €300,000 million in European savings feeds the U.S. capital markets. This capital outflow is attributed to the fragmentation of European capital markets and the lack of a mechanism to channel these funds into innovation and the community’s productive fabric.

Spain offers a way to encourage this type of investment. Spanish households are among the most reliant on cash and bank deposits, holding 34% of their savings in these low-yield assets. This is higher than in Italy (25%) or France (28%), though below Germany’s 37%, the AFME report indicates.

These accounts are low-return assets, often losing value in real terms. Bank accounts, where around a billion euros is deposited, offer interest rates of just over 0%, while inflation currently stands at 4.9%. Across Europe, the amount in such cash and deposits exceeds 10 trillion euros, equivalent to one-third of all European household financial assets.

In contrast, in the United States, nearly two-thirds of household assets are invested in capital markets.

According to the AFME, the amount of European household savings invested in capital markets has been virtually stagnant over the last decade. The average per adult was around €46,000 in 2017 and has risen to approximately €48,000 today. This figure is far behind the United States at €253,000 or the United Kingdom at €71,000, even when adjusted for the cost of living.

The AFME concludes that despite the high volume of savings in the EU, “an insufficient portion is channeled into instruments that can support corporate financing, innovation, and long-term projects.” This, the organization argues, “leaves European companies with smaller capital buffers than many of their international competitors, whether from the United States or China.”

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