"I believe in the convergence of our banking system and, with it, in stronger banks for Europe. For this reason, the Unicredit group has invested in Commerzbank and submitted an offer to purchase the Bank Bpm”. Unicredit CEO Andrea Orcel wrote it in black and white in a letter sent to Financial Times in which he explains the reasons for the two operations that have sparked the European banking risk and, with it, the controversy.
Orcel: The EU has disunited
"Europe is disappearing”. These are the words that Orcel begins his letter to the FT, which he then quotes Ken Griffin, founder of Citadel Securities. “It is lethargic compared to the United States. Their economy is not growing. Their per capita numbers are terrifying.”
The EU, the manager wrote, “has created a single market of around 450 million people, promoting stability, democracy and economic prosperity. The positive vision of that time is still possible but is undoubtedly in danger. We are going through a period of disunity in the EU, with no sense of a common direction of travel. This is even more worrying given the threat of falling even further behind the United States due to potential tariffs from President Donald Trump.”
As a continent, Orcel continues, “we are starting to realize that we need unity and much better economic growth to address all of this. And this is where the power of the single market becomes so obvious. We forget how much it has already generated the opportunities we enjoy today. And we don’t realize that this is still only a fraction of what could be and that it could vanish entirely.”
The number one of Unicredit cites the Report by Mario Draghi and Enrico Letta: “they reminded us what is at stake,” he explains. “Without pooling critical resources and increasing our structural growth, the EU will not be able to continue to deliver better living standards. We risk falling too far behind other blocs as centers of innovation and creativity. We could ultimately lose the freedoms and ideals we hold dear.”
The banking and capital market
“Our beloved single market is incomplete and needs work. We need to focus on an EU-wide growth strategy. Yet we seem unable to agree on simple things like a real capital markets union or a banking union to support investment and growth. If we succeed, many structural challenges could be overcome.”
Orcel emphasizes that “it's up to European politicians push these reforms and they would certainly have my support. But as a bank CEO, I focus on what businesses can do today. We already have the building blocks of a banking union, which could be completed quickly. Yet, we have seen very little action.”
From Commerz to Unicredit
"I believe in the convergence of our banking system and, with it, stronger banks for Europe. This is why the Unicredit group has invested in Commerzbank and submitted an offer to purchase Banco Bpm. Although these are decisions taken in the interest of our stakeholders, they also put a broader EU convergence and the future of the single market”, explains Orcel.
“They represent test cases who ask whether we, as a bloc, are serious about deeper integration,” he continues. “Are we willing to take the steps our leaders have long been calling for, or will we back down? The answer will either help unlock Europe’s growth, or confirm that real action to advance the single market remains elusive.”
"With a greater pan-European reach economies of scale and expertise are achieved at EU level. This means more capital is distributed to companies that need financing to grow and more options for raising funds, including through capital markets. This means that the most ambitious and growing companies can connect to trade flows and access new markets, especially within the EU. It means more investment in products and services that support savers. And it means stronger, more resilient and more reliable banks.”
Europe’s future competitiveness goes beyond banking and capital markets. But it is telling whether Europe is finally ready to come together to end this period of low growth for the benefit of all. We now have the opportunity – and, I believe, the duty – to expand Europe’s banking sector and with it the ambitions of our bloc. If the brilliance of our single market remains unfulfilled, I fear Draghi’s warning of a “slow death” for Europe will come true.
Without convergence, "we are witnessing a slowdown in investment, a hindered creation of wealth and an ever-widening gap between us and other blocs. Young people will leave our continent in search of opportunities elsewhere. We risk our long-term prosperity and, with it, the strength to stand up for our European ideals."
“Now we have the opportunity and I believe, the duty, to Strengthening the European banking sector and, with it, the ambitions of our bloc. If the genius of our single market remains unexpressed, I fear that Draghi's warning of a “slow death” for Europe will come true, concludes Orcel.
