Study for the European Parliament: State intervention in bank takeovers may fragment the single market

Government interventions in bank takeovers within the European Union may fuel protectionism and fragmentation of the single market, warns a study prepared for the ECON Committee of the European Parliament. The analysis, authored by Christos Gortsos and Enrico Tinti and published in October 2026, compares the regimes in France, Germany, Italy and Spain. The authors acknowledge the need to protect security and public order, but argue that these mechanisms must not be used to steer lending and investment towards the national economy. The conclusions are those of the authors and do not constitute an official position of Parliament.

In brief

The study compares intervention powers in financial transactions in France, Germany, Italy and Spain, distinguishing acquisitions from third countries from transactions between investors from the EU or from the same country.

Investment screening can protect security and public order interests. However, the authors warn that purely economic objectives do not justify restrictions on the freedoms of the single market.

The UniCredit–Banco BPM and BBVA–Sabadell examples are historical cases: UniCredit’s offer was withdrawn in July 2025, while BBVA’s attempt failed in October 2025. In the Spanish case, the intervention relied on competition law, not the foreign investment screening mechanism.

The Commission has opened proceedings concerning Italy’s and Spain’s intervention powers. In the Spanish case, the legal assessment was supplemented by an additional letter dated 4 June 2026; this is not a court ruling.

The analysis recommends European solutions and robust prudential supervision. Separately, the Commission announced legislative banking proposals for the first quarter of 2027; the study does not change the rules and does not approve any merger.

The research examines an essential limit on state intervention: protecting a legitimate interest does not give governments the freedom to block or condition any transaction. A restriction must be assessed in relation to EU law, the risk invoked and the proportionality of the measure. For investments from third countries, screening may, in exceptional circumstances, constitute legitimate protection against real threats to security and public order. Applying it to investors from the EU, including in domestic transactions, is more controversial, since it may conceal protectionist economic objectives.

The four national regimes do not have the same scope of application. The study shows that they differ with regard to the investors, activities and transactions subject to screening, including situations in which European investors may be examined. The comparison does not describe a general right of states to decide who may buy a bank. It examines how national rules intersect with the freedom of establishment, the free movement of capital and European competences.

In the banking sector, investment screening, competition control and prudential supervision have distinct objectives. Competition authorities examine the effects of a concentration on the market, while supervisors assess risks to financial institutions. The authors stress that political intervention cannot replace these assessments or use security as a pretext to impose national preferences in lending policy.

The Italian case illustrates the overlap between these mechanisms. In April 2025, the government imposed conditions on UniCredit’s offer for Banco BPM through its special investment-screening powers. The Commission separately cleared the concentration, with competition commitments, in June, and UniCredit withdrew its offer on 22 July 2025. On 21 November 2025, the Commission opened proceedings concerning Italian legislation, considering that it risked allowing unjustified economic interventions and overlapping with the ECB’s competences. The study also records the legislative amendments adopted by Italy in 2026 in response to objections.

In Spain, the government imposed additional conditions on BBVA’s takeover of Banco Sabadell through a stage of the national competition procedure. The offer was not subject to the foreign investment screening mechanism and failed in October 2025. The Commission opened infringement proceedings on 17 July 2025, challenging the breadth of the government’s powers. On 4 June 2026, it added the provisions of the new directive on capital requirements applicable to acquisitions and mergers to its assessment. These are the Commission’s objections in the context of proceedings, not a judicial condemnation of Spain.

The authors acknowledge the reasons for governments’ concerns: a takeover may raise questions about local lending, the relocation of certain functions or the channelling of savings towards another market. However, they recommend addressing these risks through Union-level solutions and independent technical assessments. In their view, cross-border consolidation can support the competitiveness of European groups, accompanied by prudential and competition safeguards, instead of national interventions dictated by immediate economic interests.

The analysis forms part of the debate opened by the Commission’s communication of 17 July 2026 on banking competitiveness. The European executive is pursuing a more integrated market, more efficient use of capital and liquidity, and the simplification of requirements, while maintaining financial stability. In explanations published on 30 July, John Berrigan, Director-General of DG FISMA, indicated the first quarter of 2027 for the presentation of legislative proposals. This is the timetable announced for proposals, not the date on which already adopted rules will enter into force.

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