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Senior European policymakers and economists have sharply criticised the German authorities over its opposition to a takeover of Commerzbank by Italian rival UniCredit, arguing its protectionist method ran counter to elementary EU rules.
“Cross-border consolidation of banks shouldn’t be seen as a political challenge. It’s technical challenge,” the Financial institution of Greece governor Yannis Stournaras advised the Monetary Instances. “It shouldn’t matter whether or not it’s a German financial institution or an Italian financial institution. What issues is that it’s robust European financial institution.”
Chancellor Olaf Scholz got here out towards UniCredit’s transfer on Commerzbank, Germany’s second-largest listed lender, after the Italian financial institution introduced it had elevated its stake within the rival from 9 per cent to 21 per cent, pending regulatory approval.
Days earlier than, the German authorities had determined to halt any additional gross sales of its remaining 12 per cent stake in Commerzbank after it bought 4.5 per cent in an after-market block commerce to UniCredit earlier in September.
“Unfriendly assaults [and] hostile takeovers will not be an excellent factor for banks and that’s the reason the German authorities has clearly positioned itself,” Scholz mentioned.
Reuters reported final week that the German finance minister Christian Lindner had additionally shared his considerations a couple of hostile takeover of Commerzbank with Italy’s Treasury.
Friedrich Merz, chief of the German opposition Christian Democratic Union, mentioned a tie-up of the 2 banks can be a “catastrophe for Germany’s banking market”, arguing that the 2005 takeover of Munich-based HypoVereinsbank by UniCredit had resulted in hefty job losses.
However economists and officers in Brussels and different European capitals have argued that Berlin’s opposition to a possible merger flew within the face of German assist for capital markets union and the consolidation of the EU’s banking sector.
A former EU commissioner, who talked to the Monetary Instances on situation of anonymity, mentioned there was a “sure contradiction between the German authorities’s assist for the creation of European champions like Airbus, and its present stance with regard to the UniCredit/Commerzbank state of affairs”.
The individual mentioned it was “troublesome to argue” towards a tie-up of each banks “if the German authorities is critically in favour of European integration and the banking union”.
Greece’s Stournaras argued that Europe’s banking sector was weakened by the very fact it was “fragmented” alongside nationwide borders, including that the superior efficiency of US banks was primarily pushed by their greater measurement and the intently built-in dwelling market.
“We’d like European banking champions that may compete with American rivals, and we want cross-border consolidation to get stronger banks,” he mentioned, including that UniCredit’s latest acquisition of a 9 per cent stake in Greek Alpha Financial institution was “welcomed by all quarters” in Greece.
In the meantime, an Italian cupboard minister advised the FT that Berlin’s method was “hypocritical” within the gentle of Lufthansa’s latest takeover of ailing Italian nationwide provider Ita Airways, previously often called Alitalia, which was authorized by Rome.
“Germany has at all times been pro-EU, they’ve lectured us all for many years about banking union and the only market, on paper we [Meloni’s government] are the nationalists, however on the subject of [Commerzbank] turning into an Italian [competitor’s] goal it’s known as a hostile act,” the minister mentioned.
Officers in Brussels are equally exasperated by Germany’s stance. They famous that Scholz made public his opposition to a takeover simply days after former ECB president Mario Draghi unveiled a report calling for the EU to finish the capital markets union and advocating mergers to create extra resilient firms.
“Actually days after the Draghi report and the beginning of a contemporary push to get capital markets integration transferring, Berlin does this and successfully rips every little thing up,” mentioned a senior EU diplomat.
A spokesperson for the European Fee declined to touch upon the difficulty with out “totally assessing” the merger proposal. However, they added: “Restrictions to the elemental freedoms [of the EU related to movement of capital, people and goods] are solely permitted if they’re proportionate and are based mostly on reputable pursuits . . . Such restrictions can’t be justified on purely financial grounds.”
Some in Germany have additionally questioned the Scholz authorities’s method. The difficulty revealed that German policymakers lacked a correct understanding of “what a capital markets union and a single market means”, mentioned Stefan Kooths, head of financial analysis on the Kiel Institute for the World Financial system, including that “firms don’t have passports”.
He mentioned the one public establishments that have been entitled to boost objections have been banking supervisors and antitrust authorities.
“It’s a debate that sadly exhibits that we right here within the EU will not be actually following the principles of the only market as they have been really supposed,” he mentioned.
