MILAN (Reuters) -UniCredit CEO Andrea Orcel said his bank’s investment in German rival Commerzbank and its bid for smaller domestic peer Banco BPM will test Europe’s commitment towards greater integration, which is necessary to avoid economic decline.
In an opinion piece published in the Financial Times on Friday, Orcel said that “while these decisions are taken in the interest of our stakeholders, they also put broader EU convergence and the future of the single market on the table.”
UniCredit has built a 28% potential stake in Commerzbank and launched a buyout proposal for Banco BPM in Italy, meeting strong resistance on both fronts.
Orcel cited comments by Ken Griffin, founder of market maker Citadel Securities, earlier this month about Europe being “lethargic compared to the United States” and with “per capita numbers [that] are horrific.”
“When America’s top financiers make that kind of assessment about our continent, it is time to wake up and respond,” Orcel said.
“Without pulling critical resources together and stepping up our structural growth, the EU cannot continue to deliver better living standards. We risk falling too far behind other blocs as centres of innovation and creativity. We may ultimately lose the freedoms and ideals we hold dear,” he said.
Orcel also cited reports by former European Central Bank President Mario Draghi and former Italian Prime Minister Enrico Letta on measures to revive productivity and drive economic growth in Europe.
“We have heard the calls to drive integration of Europe’s banking system so we can have greater firepower to finance new infrastructure and business growth. Yet we have seen precious little action,” Orcel said.
The Commerzbank investment and the BPM bid stem from a belief in the need for stronger banks for Europe, he added.
“They represent test cases that ask if we, as a bloc, are serious about greater integration,” Orcel wrote.
(Reporting by Valentina Za, editing by Alvise Armellini and Elaine Hardcastle)
