The EU’s financial policy is moving away from regulatory oversight and sustainability-driven finance toward market-driven capital flows and competitiveness, writes Apostolos Thomadakis.
The European Commission’s approach to financial markets is undergoing a significant transformation. While Ursula von der Leyen remains at the helm, her selection of Maria Luís Albuquerque as Commissioner for the newly renamed Savings and Investments Union signals a marked departure from the regulatory-driven approach that characterised von der Leyen’s first term and was implemented by her predecessor, Mairead McGuinness.
This shift is not merely one of personnel – it reflects a deeper strategic realignment in the Commission’s priorities. Comparing ex-Commissioner McGuinness’s first speech in October 2020 with Albuquerque’s February 2025 keynote at the ESMA Conference underscores how the EU’s financial policy is moving away from regulatory oversight and sustainability-driven finance toward market-driven capital flows and competitiveness.
A tale of two Commissioners
McGuinness’s first speech was steeped in the language of systemic transformation. She declared that “the future will be green and digital and will require fundamental changes”, framing the financial system as a tool to enforce sustainability objectives. Her focus was squarely on regulatory intervention, particularly through the EU Taxonomy and the Sustainable Finance Strategy, arguing that “the rules of the game must be transformed” to embed climate and environmental objectives into finance.
In stark contrast, Albuquerque’s first speech was defined by a market-driven vision, prioritising competitiveness, retail investor engagement and reducing regulatory burdens. Rather than emphasising the role of finance in driving sustainability, she spoke of “shaping a prosperous future” through capital market deepening, signalling a clear shift toward fostering investment rather than imposing regulatory constraints.
From sustainability to competitiveness
McGuinness’s tenure was defined by an interventionist approach, wherein the Commission sought to reshape financial markets to align with the Green Deal. Her speech reflected this ethos, emphasising that “climate and environmental risks must be integrated into the financial system” and that private capital should be channelled toward sustainability through regulatory frameworks and reporting obligations.
Albuquerque, by contrast, hardly mentions sustainability. Instead, she speaks of “building trust in Europe’s capital markets” and “removing obstacles to investment”. This represents a notable shift in focus: under McGuinness (or von der Leyen I), regulation was seen as the mechanism to shape financial markets; under Albuquerque (or von der Leyen II), it is regarded as a potential barrier to investment that must be carefully managed.
A different policy direction under the same Commission President
It is striking that while von der Leyen remains Commission President, her approach to financial markets has changed so dramatically. The decision to rebrand the Commissioner’s portfolio from Capital Markets Union to Savings and Investments Union is itself revealing. The emphasis on savings and investments marks a pivot from top-down regulatory intervention toward stimulating retail investor participation and deepening capital markets.
This change aligns with broader political realities: von der Leyen’s first term was defined by ambitious regulatory frameworks, including the Corporate Sustainability Reporting Directive, the Sustainable Finance Disclosure Regulation and the Green Deal. However, the political appetite for further heavy-handed regulation appears to be waning. The second von der Leyen Commission seems more concerned with growth, competitiveness and market-driven finance – a shift that Albuquerque embodies.
A clear indication of this shift is the Sustainability Simplification Omnibus, which has been framed as a necessary streamlining of sustainability reporting rules but in reality represents a broader retreat from the EU’s ambitious sustainability agenda. On one hand, it reduces reporting burdens on companies, but on the other, it weakens the regulatory push that was central to the EU’s Green Deal strategy. The direction set by Albuquerque’s speech fits within this broader deregulatory trend.
What to expect
While financial institutions may welcome this shift, it raises questions about whether the EU is stepping back from its leadership role in sustainable finance. McGuinness’s message was clear: “the transition is not happening fast enough” and regulatory force is required to accelerate it. Albuquerque’s approach, by contrast, leans toward market liberalisation, prioritising the removal of investment barriers over enforcing sustainability goals.
This transition is not merely rhetorical – it is deeply political. It suggests that the EU is shifting away from its regulatory-heavy, sustainability-focused agenda toward a more market-driven, investment-friendly approach. Whether this new direction enhances the EU’s competitiveness and financial stability – or creates unintended risks – remains to be seen. What is clear is that the von der Leyen Commission’s second term is charting a markedly different path from its first.
Note: This article gives the views of the author, not the position of EUROPP – European Politics and Policy or the London School of Economics. Featured image credit: © European Union
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