A potential merger between a German bank and an Italian rival would not normally elicit much interest beyond the business pages. But these are not normal times. The Italian bank UniCredit recently provoked a political backlash in Germany by acquiring a 21% stake in the German lender Commerzbank. Even chancellor Olaf Scholz weighed in, calling the Italian move “an unfriendly attack”. The significance of this row runs far beyond the worlds of Italian and German finance.
News of the acquisition came just weeks after the publication of a report by Mario Draghi, the former president of the European Central Bank, on how to address the EU’s declining competitiveness against the US and China. The former Italian prime minister warned that the EU faces “slow agony” unless it takes radical action. One of Draghi’s key recommendations was the need for deeper financial integration. In that context, German hostility to any tie-up raises serious questions about Berlin’s political commitment to wider European reform.
