Europe must decide on the banking union

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The author is the CEO of UniCredit

“Europe is getting lost.” Citadel Securities founder Ken Griffin said so in early December. “It’s sluggish compared to the United States,” he added. “Their economy is not growing. Their per capita numbers are appalling.” When America’s top financiers make such assessments of our continent, it’s time to wake up and respond.

It is now more than two decades since the EU went through its biggest ever enlargement. In one fell swoop, it created a single market of nearly 450 million people, promoting stability, democracy and economic prosperity. The positive vision of that time is still possible but it is undoubtedly distorted.

We are going through a period of EU disunity, with no sense of a common direction of travel. This is all the more worrisome given that President Donald Trump’s potential tariffs threaten to push the U.S. further back. And I hardly need mention the geopolitical issues that have plagued us in recent years.

As a continent, we are beginning to realize that we need unity and better economic growth to deal with all this. This is where the power of the single market becomes so obvious. We forget how much the opportunity we enjoy today has driven us. We also fail to realize that it is still only a fraction of what it could be and that it can disappear entirely.

Recent reports on the EU by Enrico Lattus and Mario Draghi have reminded us what is at stake. Without mobilizing critical resources and stepping up our structural growth, the EU cannot deliver better living standards. We risk falling far behind other blocs as centers of innovation and creativity. We may eventually lose our cherished freedoms and ideals.

Our cherished single market is incomplete and needs work. We need to focus on an EU-wide strategy for growth. Yet we can’t seem to agree on simple things like a capital market or a banking union to support investment and growth. If we do that, many structural challenges can be overcome.

It is up to Europe’s politicians to push these reforms, and they will certainly have my support. But as CEO of a bank, I am focused on what businesses can do today We already have the pillars of a banking union, which can be completed quickly. We have heard calls for integration of Europe’s banking system so that we have more firepower to finance new infrastructure and business growth. Yet we have seen precious little progress.

I believe in the integration of our banking system and with it a stronger bank for Europe. This is why UniCredit Group invested in Commerzbank and offered to buy Banco BPM. While these are decisions taken in the interests of our stakeholders, they put the future of wider EU convergence and the single market on the table.

They represent test cases that ask whether we, as a bloc, are serious about greater integration. Are we willing to take the steps our leaders have been calling for for a long time or will we get cold feet? The answer will either help unlock Europe’s growth, or ensure that real action to move the single market forward remains elusive.

With strong pan-European reach comes economies of scale and EU-wide efficiency. This means greater deployment of capital to businesses that need finance for growth and more options to raise finance through capital markets. This means more ambitious, growing businesses can connect to trade flows and access new markets, particularly within the EU. This means more investment in goods and services to support savers. And that means stronger, more resilient, more trusted banks

Without convergence, we are witnessing a lag in investment, a stumbling block in wealth creation and a 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 our power to uphold EU ideals.

This is not a call for more centralized decision-making. All EU states have their specialties and deep expertise; We should not interfere or micromanage. However, we must pull toward a common goal of growth and long-term success and translate our agreed-upon vision into action without excuses.

There is more to Europe’s future competitiveness than banking and capital market systems. But it does signal 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 boost Europe’s banking sector and with it the ambitions of our bloc. If our single market genius remains unfulfilled, I fear that Draghi’s warning of “slow pain” for Europe will come true.