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UniCredit’s plan to take over Commerzbank has encountered significant resistance in Germany and sparked a broader debate across the European Union over the limits of national intervention in strategic banking deals.

The Italian banking giant had quietly accumulated nearly 30% of Commerzbank shares, a move that alarmed German regulators and prompted criticism from political and financial circles. The backlash has effectively stalled the takeover, leaving UniCredit to reconsider its strategy in a highly regulated and politically sensitive environment.

EU Concerns on National ‘Golden Powers’

Maria Luis Albuquerque, the EU Commissioner for Financial Services, highlighted the challenges posed by national restrictions on cross-border bank mergers. Speaking during a visit to Italy, she emphasized the difficulty in creating European banks capable of competing globally when member states exercise powers that may conflict with EU rules.

Albuquerque specifically referenced Italy’s “golden power” legislation, which allows the government to intervene in strategic sectors, including banking, to protect national interests. Italy recently used this law to impose conditions on UniCredit’s acquisition attempts, which some EU officials argue could undermine the integrity of the single market.

Italy Stands Its Ground

Italian Prime Minister Giorgia Meloni has reiterated that member states must retain authority over national security matters, defending Rome’s use of golden powers. Italian authorities are currently negotiating with the European Commission to amend the law and avoid a formal EU infringement procedure.

Meanwhile, UniCredit has already experienced the impact of these regulations. In July, the bank cited Italian government conditions as the reason for withdrawing its takeover bid for Banco BPM, another key Italian lender. Reports suggest the EU Commission may soon order Italy to lift these conditions while also challenging the broader golden power framework.

Next Steps

A decision from the EU’s college of commissioners could come around mid-November. Until then, discussions between Italian and EU officials continue to determine whether Rome can adjust the legislation to meet EU standards. The outcome of these negotiations could reshape the landscape for future cross-border banking deals in Europe.