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ROME (Reuters) – National governments should refrain from intervening as UniCredit seeks a potential tie-up with Commerzbank if Europe is to move towards closer integration, the author of a recent report on the single European market told Reuters on Wednesday.
Italy’s UniCredit angered the German government this week by raising its holding in Commerzbank close to 21%, conditional on European Central Bank approval, using derivative instruments.
“Politics must let the market determine the choices in this case. The market is European, not national,” said former Italian Prime Minister Enrico Letta who has encouraged further integration within the EU’s financial sector in his report.
“The UniCredit-Commerzbank deal seems to be an immediate test of whether we want to move forward in Europe, or go backwards”, said Letta, who is President of the Jacques Delors Institute.
Letta’s report proposes a series of steps needed to enable the European Union to compete effectively with the United States, China and other rivals.
Presenting his study in April, Letta said the biggest overall impact could come from channelling the 33 trillion euros ($35.12 trillion) of private savings into the real economy. About a third of that is now held in current accounts.
The report said the 300 billion euros of family savings going overseas, mainly to the United States, highlighted the shortcomings of the EU’s fragmented markets.
(Reporting by Giselda Vagnoni;Editing by Elaine Hardcastle)