BRUSSELS, May 5 - The chairman of the euro zone finance ministers’ group told MEPs on Tuesday that European banks must grow in scale if they are to compete with their United States and Chinese peers. He said the EU should aim for pan-European financial champions rather than a patchwork of national leaders.
Addressing the European Parliament’s economic committee, Kyriakos Pierrakakis said national protectionism often prevents the mergers that could create large continental banks. He cited political resistance as a concrete obstacle, pointing to Berlin’s rejection of Italy’s UniCredit bid for Germany’s Commerzbank as an example of how national concerns can block cross-border consolidation.
Pierrakakis framed the issue in stark terms:
"We need European champions. We don’t need national champions. All of us have a tendency to be more protective about our national market, of course,"
He emphasized that scale matters not just for market power but for investment capacity. Europe’s biggest bank by market value, Banco Santander, is five times smaller than the largest bank in the United States, JPMorgan Chase, a disparity Pierrakakis said underlines the urgency for enlargement.
One of the primary drivers for larger banks, he argued, is the need to commit significant resources to technological development. Rapid growth in digital financial instruments and markets means banks that cannot fund major upgrades risk falling out of the competitive equation.
"Let’s try to think five years ahead or 10 years ahead. If they miss out on the technological investments that I just mentioned, they won’t be part of the equation,"
Beyond consolidation, Pierrakakis advocated for a more cohesive single market for financial services, including a centralised supervisor for capital markets. The European Commission has proposed a single supervisor, but the plan faces opposition from some member states, notably Luxembourg and Ireland.
"We need centralized supervision in our capital markets... because ...we shouldn’t be doing the same thing 27 times, and if you do the same thing 27 times, we are effectively not a complete capital market,"
His comments underline two linked policy priorities: creating institutions with the scale to finance extensive technology programs, and simplifying regulatory structures to allow a functioning pan-European capital market. He positioned both measures as necessary steps for EU banks to retain a seat at the global table dominated by larger American and Chinese rivals.
The remarks highlight ongoing tensions between national political preferences and the push for deeper European integration in finance. They also frame the debate around whether structural change - through cross-border consolidation and regulatory centralisation - is needed to match the balance sheets and investment capacities of non-EU competitors.
Context note: The speaker made these points to the European Parliament’s economic committee and linked the need for scale and unified supervision directly to competitive pressures from US and Chinese banks.