(News Bulletin 247) – Friedrich Merz calls for the creation of a European stock exchange, while more and more companies are giving in to the lure of a listing outside their original stock exchange, and in particular in the United States and Asia.

German Chancellor Friedrich Merz called on Thursday for the creation of a European financial center to compete with its American and Asian rivals, in order to avoid the flight of capital from companies on the continent, losing competitiveness.

In a speech to German MPs ahead of an EU summit next week, the chancellor reiterated the need to unify the European Union’s capital markets.

This veritable sea serpent of the 27 summits plans to harmonize the regulations of the various European stock exchanges, to accelerate financial flows within the EU and facilitate investments.

“Our companies need a sufficiently broad and deep capital market to be able to finance themselves better, and above all, more quickly” declared the manager.

To slow down the exile

Berlin and Brussels therefore “need a European Stock Exchange so that successful companies like, for example, BioNTech in Germany, do not have to go to the New York Stock Exchange”, he added. The laboratory known for its vaccine against Covid-19 has been a Nasdaq company since 2019.

Other German companies have also turned their backs on the Frankfurt stock exchange for that of New York, such as the famous sandal brand Birkenstock or the gas giant Linde.

The latter left the Dax in 2023, denouncing the German stock market rules which restricted its performance, which was a massive blow for the Frankfurt market.

It is only thanks to a European Stock Exchange “that the creation of value from German and European research will remain in Europe”, according to Friedrich Merz.

The Euronext example

Mired in stagnation, the European Union and its flagship companies, particularly German ones, are threatened with economic and technological decline vis-à-vis China and the United States.

The risk is that Europe will become a “toy for the major economic centers in Asia and America,” the Chancellor also declared.

At the forefront of this European financial consolidation is Euronext, the operator of the Paris Stock Exchange, which has bought several places (Oslo, Milan) and is preparing to buy that of Athens, after the launch of a public exchange offer at the beginning of October.

Several attempts to merge with its major competitor, the German Deutsche Börse, have failed in the past.

(With AFP)