By Chr. Christodoulou-Volos
- Professor of Macroeconometrics and Finance
- Chair of the Department of Economics and Management at Neapolis University Pafos
The recent remarks by European Commission President Ursula von der Leyen at the La REF conference organized by the French business association MEDEF in Paris, on August 27, sparked a particularly important discussion about the future of the European economy.
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Her reference to approximately €10 trillion in European savings that remain largely idle in bank deposits was no accident. The message was clear: Europe lacks neither wealth nor capital. It lacks the mechanisms that could channel a larger portion of this wealth into investments in the European economy, technology, industry, and, now, defense.
For Cyprus, however, this discussion has a very special significance. Cypriot society knows better than many other European societies just how sensitive the issue of bank deposits is. The experience of the 2013 economic crisis has left a deep mark on the collective memory. For Cypriot citizens, a bank deposit is not merely a financial product. It is linked to security, a lifetime of savings, retirement, family assets, and, above all, trust in the banking system.
That is why any discussion in Brussels regarding the “mobilization” of Europeans’ savings must be treated with particular caution in Cyprus.
Von der Leyen’s statement does not mean that the European Union plans to seize or freeze citizens’ deposits. The essence of European policy lies in creating a system that will encourage citizens to voluntarily convert part of their savings into investments.
However, for Cyprus, this distinction is crucial. Depositors’ trust cannot be taken for granted. Since 2013, any policy or public statement that creates the impression that citizens’ savings constitute a “reservoir” for economic or political purposes may cause concern.
This is precisely why European policy must be based exclusively on voluntary incentives, transparency, and strong protection for savers. At the same time, however, the new European strategy can also create significant opportunities for the Cypriot economy.
Cyprus is a small, open economy with a strong financial and professional sector. It possesses significant expertise in financial services, investment management, investment funds, shipping, and international business services.
If the European Union truly moves forward with creating a more integrated and efficient capital market, Cyprus could claim a more active role as a regional financial and investment hub. This could mean more opportunities for Cypriot companies to raise capital, but also for Cyprus to attract investment funds and companies seeking access to the European market.
The major challenge for Cyprus is that small economies often find it harder to secure funding for innovative businesses. A young Cypriot entrepreneur developing a technology, artificial intelligence, or cybersecurity may have an excellent idea but lack easy access to the substantial capital needed for international expansion.
This is precisely one of the problems the European Commission is trying to address: enabling European companies not only to be founded in Europe, but also to grow in Europe.
For Cyprus, this prospect could be particularly significant. The country has a highly educated workforce, universities, a growing technology ecosystem, and a geographic location that connects it to three continents. What is often lacking is access to larger pools of capital.
A truly European investment market could, in theory, allow a Cypriot company to raise funding from investors in Germany, France, the Netherlands, or Scandinavia without the current barriers and market fragmentation.
But there is also a strategic dimension. Europe is entering an era in which economic growth, technology, and security are increasingly intertwined. Investments in cybersecurity, unmanned systems, telecommunications, satellites, and artificial intelligence are no longer merely commercial investments. They are part of Europe’s security strategy.
For a country like Cyprus, located in a geopolitically sensitive region of the Eastern Mediterranean, the discussion on European strategy and defense autonomy takes on particular significance. Strengthening Europe’s economic and technological base is not an abstract issue confined to Brussels. It can directly affect the stability and security of the broader region.
However, channeling private savings toward investments also creates real risks. Deposits and investments do not carry the same level of risk. Stocks, mutual funds, and corporate bonds can offer higher returns, but they can also lead to significant losses.
For Cyprus, given its difficult past experience, protecting small savers must be an absolute priority.
Europe must not view the €10 trillion as a “fund” simply waiting to be used. It must create an environment where citizens have real choice, accurate information, and effective protection.
The great challenge is to strike the right balance: more investment without undermining security, more economic momentum without losing trust.
Ursula von der Leyen’s statement ultimately reveals a deeper shift in the European economic model. Europe is attempting to transform its vast private wealth into economic, technological, and strategic power.
For Cyprus, the challenge is twofold. On the one hand, it must capitalize on the opportunities that a more integrated European investment market can create. On the other hand, it must consistently and resolutely defend the trust and security of its citizens.
The real question, then, is not whether Europe will “take” its citizens’ savings. It is whether it will be able to create a system reliable enough that citizens themselves will choose to invest part of their wealth in Europe’s future.
And for Cyprus, which has paid dearly in the past for a loss of confidence in the financial system, the answer to this question can only be one: no new European economic strategy can succeed without the absolute protection of savers and without restoring and maintaining citizens’ trust.
