In a report published on Thursday 7 May, the European Central Bank (ECB) notes an improvement in euro area financial integration since the end of 2022, reflecting, according to the monetary institution, “stable market functioning [... and] broad advances on bond, equity and banking markets”. However, the integration of equity markets is declining.
“Equity market integration has declined since 2022. Cross-border equity investment within the euro area is stagnating and intra-euro area foreign direct investment has fallen to historically low levels”, said the ECB on Thursday.
“Euro area households continue to hold a large share of their savings in low-yielding deposits, while a significant portion of equity investment is channelled outside the EU”, noted the Frankfurt-based institution, which on Thursday welcomed former Italian Prime Minister Enrico Letta, European Commissioner for Financial Services and the Savings and Investment Union Maria Albuquerque and other senior European officials for a series of discussions on financial integration in 2026.
Strengthening the single market to cope with international shocks. Acknowledging the weight of deeply entrenched positions that have hampered debates on greater financial integration for years, the European commissioner stressed the need for the Union to adapt to the current international geopolitical and economic context.
“We must recognise that the current geoeconomic context is our new normal, and ensure that our economy provides protection from shocks outside of our control”, said Albuquerque.
“A stronger and more integrated single market, truly one market, including a stronger European financial sector, can build our economic defences, including to shocks like the one we are currently experiencing”, she continued, recalling the various measures proposed by the European Commission since March 2025.
MISP. When questioned about the new legislative package on Market Integration and Supervision (‘MISP’), given the EU countries’ differing views on the need for centralised financial supervision (see EUROPE 13862/2), the commissioner said she could count on European Parliament’s support.
As far as the EU Council, Ms Albuquerque acknowledged firmly entrenched positions. “I think that there is clearly a supporting majority, but with a clear preference for watering down our level of ambition. But discussions are still ongoing, so I remain hopeful that we can deliver something really meaningful”, she said.
See the ECB report: https://aeur.eu/f/lu1 (Original version in French by Bernard Denuit)