The European Commission is intensifying efforts to prevent national governments from obstructing cross-border bank mergers, issuing direct warnings this week to Italy and Spain over actions deemed incompatible with EU law.
In a push to encourage banking sector consolidation and strengthen the competitiveness of the EU’s financial system, Brussels has accused both Rome and Madrid of unlawfully intervening in high-profile merger attempts. Officials argue such interference undermines the creation of “European champions” in banking, needed to compete globally, particularly with U.S. counterparts.
“This is pure political posturing,” said a senior EU official. “The rules are clear—governments have no formal power to block these mergers.”
Italian Government Under Fire for UniCredit–BPM Conditions
Earlier this week, the European Commission sent a private letter to the government of Italian Prime Minister Giorgia Meloni, stating it had reached a preliminary conclusion that Rome had violated EU merger regulations. The complaint centers on the Italian government’s use of “golden powers” to impose five conditions on UniCredit’s proposed €10 billion acquisition of Banco BPM.
One of the conditions—requiring UniCredit to exit Russia—was singled out in the letter as a breach of EU law. The commission also dismissed Rome’s justification that the deal posed a “serious threat to public security,” stating it had no evidence of any banking transaction within the EU ever constituting such a threat.
Brussels has given the Italian government 20 working days to respond. Meloni’s office stated that it would cooperate fully, highlighting that an Italian court had previously upheld the government’s intervention as legal on national security grounds.
Spain Faces Formal Notice Over BBVA–Sabadell Block
Three days after its communication with Italy, the Commission issued a formal infringement notice to Spain over its move to block a merger between BBVA and Banco Sabadell for a period of at least three years. The EU demanded that Madrid revise legislation enabling such interventions in the banking sector.
The Commission sees these interventions as a broader trend of governments protecting “national champions”, a strategy Brussels believes is counterproductive. Former Italian Prime Minister Enrico Letta, who authored a major report on EU market integration, echoed this sentiment:
“Europe must move away from the philosophy of national champions and build true European champions—what we need is the Airbus of banks.”
Germany’s Concerns Over UniCredit–Commerzbank
Although not yet subject to formal action, Germany has voiced strong opposition to UniCredit’s recent stake-building in Commerzbank, as it considers a possible takeover. Chancellor Friedrich Merz said Friday that the proposed merger would not gain support unless UniCredit could prove the combined entity would not pose systemic risks.
“It’s an unfriendly approach we do not accept,” Merz said. “Such an institution could present significant financial risk due to its balance sheet structure.”
Broader Context: EU Push for Consolidation
The EU sees banking consolidation as essential for a more integrated and competitive financial sector. A wave of attempted M&A activity in the banking space—including UniCredit’s outreach to BPM and Commerzbank, as well as BBVA’s bid for Sabadell—has faced political resistance across member states.
The European Commission’s recent actions mark a firm step toward enforcing single-market rules, aiming to remove political barriers that hinder cross-border financial integration. While no formal legal proceedings have been initiated yet, Brussels has made clear its increasing intolerance for political interference in the private banking sector.
