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UniCredit nears majority voting control of Commerzbank, signaling major European banking consolidation

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Italy’s UniCredit has secured just under half of the voting rights in Germany’s Commerzbank following a successful takeover bid, setting the stage for a major realignment of the European banking landscape.

According to a report by German Foreign Policy, the Italian lender is positioned to seize control of both the supervisory and management boards of Germany’s second-largest private bank at the annual general meeting of shareholders in 2027.

In this acquisition campaign, UniCredit has drawn support from an international network of financial institutions, including Japan’s Nomura, France’s BNP Paribas, and several US banks.

The development not only brings a near two-year power struggle between the major German and Italian lenders to a close, but also underscores the broader, ongoing consolidation within the European banking sector.

As UniCredit positions itself as a new European banking group, Germany increasingly finds itself on the defensive.

Commerzbank, a cornerstone of the Frankfurt financial center and a vital source of credit for Germany’s small and medium-sized enterprises (SMEs), is now transitioning to foreign control.

The conflict highlights the deep-seated tension between the integration of the European financial sector and the national interests of individual member states seeking to maintain control over their domestic economic hubs.

UniCredit secures majority voting stake

In early May, UniCredit launched a takeover bid that remained open until early July, offering 0.485 of its own shares for each share of Commerzbank.

Following the expiration of the offer period, UniCredit announced that it had acquired 17.6% of Commerzbank’s shares through the share exchange offer.

This transaction lifted its total holdings in the Frankfurt-based lender from 26.77% to 44.37%, effectively handing UniCredit victory in the two-year battle for control.

When factoring in an additional 3.22% stake that UniCredit holds through derivative instruments, its total shareholding reaches 47.59%.

Because the treasury shares held by Commerzbank do not carry voting rights, UniCredit’s stake translates to 49.65% of the total voting rights, according to the Italian bank’s own data.

In addition, UniCredit holds derivatives representing another 13% of Commerzbank shares, though these instruments do not currently carry voting rights.

At the next annual general meeting scheduled for the spring of 2027, eight of the ten shareholder representatives on the supervisory board will stand for re-election.

Leveraging its majority at the annual meeting, UniCredit will be in a position to decisively influence the allocation of these key seats.

Criticism of the bid and “market manipulation” claims

Since the transaction, allegations of market manipulation in connection with the takeover bid have been raised.

However, the Commerzbank General Works Council, which filed a formal complaint against unidentified individuals, suffered a legal defeat in its challenge.

Commerzbank’s management has also repeatedly criticized UniCredit’s disclosures and brought the matter to the attention of BaFin, Germany’s financial regulatory authority.

According to the regulator, a significant portion of the tendered shares belonged to banks and market participants closely linked to UniCredit.

Commerzbank contends that there is a lack of transparency regarding the volume of borrowed shares that were tendered and the specific hedging agreements that remain in force.

It is established that Nomura of Japan, Citigroup of the US, and BNP Paribas of France conducted swap transactions with UniCredit involving Commerzbank shares.

Alongside these institutions, UniCredit can also rely on other major financial firms, including Jefferies and Bank of America.

These partner banks provide UniCredit with potential access to an additional 13% of Commerzbank shares at a specified time.

German government faces potential removal from bank management

In mid-June, UniCredit threatened to replace Commerzbank’s supervisory and management boards.

To execute such a move, however, the major Italian bank would need to replace the two supervisory board members appointed by the German federal government.

The German government secured the right to appoint two representatives to the supervisory board following its state-funded bailout of Commerzbank.

UniCredit has now stated that, provided it receives “sufficient shareholder support” at the annual general meeting, it will be “in a position to elect all shareholder representatives to the supervisory board.”

If UniCredit successfully replaces Commerzbank’s supervisory and management boards at the 2027 annual meeting, it would represent a direct setback for the federal government.

The move would directly impact supervisory board members whose government-appointed terms run through 2029.

Commerzbank’s critical role in the German economy

For the Frankfurt financial center, these developments present a serious challenge.

Commerzbank is a foundational institution of the German financial sector, maintaining deep-seated ties with Germany’s small and medium-sized enterprises (SMEs).

Should the bank be reduced to a branch of UniCredit, key lending decisions would be routed to Milan instead of being resolved in Frankfurt.

Consequently, the Frankfurt financial hub risks losing influence, decision-making authority, and economic sovereignty.

According to Commerzbank, the institution processes approximately 30% of Germany’s foreign trade. Many of the bank’s employees view this extensive reach as a key competitive advantage.

Commerzbank supports the international commercial activities of a vast number of mid-sized firms that frequently struggle to find suitable, dedicated points of contact within larger international banks.

The “consolidation” trend in the European banking system

While the takeover of Commerzbank has met with widespread resistance in German political circles, it has received strong backing from economists, particularly those from other EU member states.

Monika Schnitzer, head of the German Council of Economic Experts, believes there are sound economic reasons to analyze cross-border mergers rather than rejecting them reflexively.

In her view, the European financial market remains insufficiently integrated. She further argues that German banks are highly inefficient by international standards and are therefore ill-equipped to compete against major global institutions.

As early as 2024, European Central Bank (ECB) President Christine Lagarde of France stated that cross-border banking mergers are “desirable” to strengthen European banks in their competition with major US rivals.

Luis de Guindos, the Spanish Vice-President of the ECB, has similarly criticized the German government’s protectionist stance.

In a recent opinion piece published in the Handelsblatt newspaper, Omid Nouripour, Deputy President of the Bundestag (Alliance 90/The Greens), accused the federal government of inconsistency.

Nouripour argued that while the government champions a banking union at EU summits, it reacts to a concrete cross-border bank merger with a “reflex of a national ownership mentality.” He criticized the federal government for praising European integration only “as long as it remains abstract.”

EU Competition Commissioner Teresa Ribera also urged member states to support cross-border banking consolidations. “Member states should welcome such transactions for the public good,” Ribera said.

Signals of compromise from Berlin

The German federal government initially reacted with hostility to UniCredit’s successful takeover bid.

“From the federal government’s perspective, UniCredit’s aggressive and hostile approach remains unacceptable,” the Federal Ministry of Finance said in a statement.

At the same time, Berlin rejected the Italian bank’s takeover offer for its remaining Commerzbank shares.

Last week, Chancellor Friedrich Merz, speaking before parliament ahead of the summer recess, reiterated that the federal government had not accepted UniCredit’s offer and was retaining its shares, unlike a “significant portion” of other shareholders.

However, in the same address, Merz adopted a more conciliatory tone, assuring, “We are not blocking this merger.”

According to the Handelsblatt newspaper, the terms of the takeover are currently being negotiated within the federal government.

Among other stipulations, Berlin is demanding that Commerzbank remain a key lender for German small and medium-sized enterprises.

In addition, the federal government is demanding that Frankfurt, the historic headquarters of the financial institution, remain a major hub for the bank.

UniCredit’s German headquarters has been based in Munich since its 2005 acquisition of HypoVereinsbank.

Europe

Eight EU states push to curb foreign policy vetoes

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Eight European Union member states, including Germany and France, want to reorganise the bloc’s foreign policy decision-making process.

The member states circulated the proposal, obtained by Bloomberg, ahead of informal meetings of EU defence and foreign ministers taking place in Ireland this week.

Many foreign policy decisions require unanimity, a requirement that has caused specific initiatives to remain blocked for years.

Former Hungarian Prime Minister Viktor Orban regularly used this veto power to block sanctions against Russia or halt support provided to Ukraine.

The document acknowledges a “radically altered environment shaped by strategic competition, growing instability, and attempts to undermine the rules-based international order”, and notes that the EU must “mobilise its collective political, economic, and diplomatic weight swiftly and effectively”.

Although the countries support “consensus as far as possible”, they are seeking solutions to accelerate the decision-making process and prevent bottlenecks without the need to rewrite the treaties, a step that would itself require unanimity.

The document proposes principles such as “sincere cooperation, avoiding linking unrelated policy debates, and constructive abstention” to ensure that member states can oppose a decision without vetoing it.

A group of countries made a similar attempt last year, but the effort is being brought back onto the agenda in the context of a broader debate on transforming the EU’s diplomatic service.

A proposal backed by Germany aims to integrate this service into the European Commission, the EU’s executive arm, in order to centralise foreign policy activities.

Under the Franco-German plan, Kaja Kallas would assume a more active role and hold broader responsibilities within the European Commission. However, Ursula von der Leyen would retain the final say on foreign policy.

Under the complex architecture of the Lisbon Treaty, the High Representative leads the European External Action Service (EEAS) and designs, coordinates, and implements foreign policy on behalf of the 27 member states.

The High Representative also serves as one of the vice-presidents of the European Commission.

However, heavy portfolios that shape the course of international policy, such as trade, energy, climate, and migration, fall largely under the Commission’s remit, leaving the EEAS without tangible leverage to bring to the table.

Enlargement, another area with a distinct geopolitical dimension, rests entirely within the hands of the Commission.

This division of competences has allowed Ursula von der Leyen to expand her foreign policy role significantly.

She has also pursued an intensive travel schedule to sign various high-profile agreements.

Von der Leyen’s expanding influence has caused surprise in capitals and generated occasional criticism alleging “overreach” and a “power grab”, despite her being frequently encouraged by EU leaders to take the lead in global crises.

The Franco-German plan envisages giving Kallas an active role in coordinating external relations areas run by Commission directorates-general (DGs), such as development aid (DG INTPA), humanitarian aid (DG ECHO), defence industry (DG DEFIS), and neighbourhood relations, which are divided between DG ENEST (Eastern Europe) and DG MENA (Middle East, North Africa, and the Gulf).

The high-stakes trade portfolio could also be considered.

To strengthen the new structure, a dedicated foreign policy department would be established. Until its integration into the EEAS in 2010, the Commission operated a directorate-general for external relations (DG RELEX).

In practice, Kallas would have broader and direct responsibilities within the Commission.

Yet this expansion of authority would ultimately benefit von der Leyen, as she would remain the supreme authority as Commission President, mirroring the hierarchical relationship between a prime minister and a foreign minister at national level.

The EEAS, which Kallas currently runs independently of von der Leyen, would be weakened to reduce the risk of institutional conflict.

This reform requires amending the 2010 decision establishing the European External Action Service (EEAS) rather than the Lisbon Treaty. Unanimous agreement will also be required on this matter.

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German historians condemn draft law on post-war expulsions

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Historians in Germany are criticising the federal government’s policy regarding Eastern Germans who were “resettled” after the Second World War.

According to a statement issued by the Association of German Historians (VHD), the new draft law concerning the Flight, Expulsion, and Reconciliation Foundation—tabled in the Bundestag in mid-August—reduces the complex events of the post-Second World War “resettlement” process to “German suffering”. It ignores the necessary historical context, namely the war of annihilation waged by Germany in Eastern and South-Eastern Europe, and thereby creates a “self-referential national narrative” hitherto developed primarily by expellee associations.

Historians point out that this situation jeopardises reconciliation efforts, particularly with Poland and the Czech Republic.

Because this change of focus directly affects the permanent exhibition maintained by the foundation at the Documentation Centre for Flight, Expulsion, and Reconciliation in a central district of Berlin, it will generate a broad public impact.

This development goes hand in hand with the revival of Berlin’s former “Germanness” policy towards minorities in Eastern Europe and Central Asia.

Post-war German migration exhibition: where is Nazi Germany?

According to German Foreign Policy, the starting point of the recent debates surrounding the Flight, Expulsion, and Reconciliation Foundation was the permanent exhibition at the Documentation Centre for Flight, Expulsion, and Reconciliation, which is operated by the foundation and opened at the Deutschlandhaus in Berlin in 2021.

Spanning two floors, the exhibition chronicles the resettlement of the German-speaking population from Eastern and South-Eastern Europe after the Second World War. The exhibition thus addresses historical events within a two-part context.

As the historian Felix Ackermann, who teaches at the Distance-Learning University of Hagen, described by way of example, the first floor presents “the pre-history of ethnic nationalism and state-enforced migration”, particularly in the context of various cases of flight, expulsion, and resettlement in 20th-century Europe.

Building on this content, the second floor focuses on the post-war resettlement of Germans.

However, this core element of the permanent exhibition is preceded by a very brief overview of the war in which Nazi Germany occupied significant parts of Eastern and South-Eastern Europe.

This aspect is of vital importance because without this knowledge, the complexity of the “resettlement” process cannot be evaluated in its proper context and adequately understood.

The Polish border issue

The overall structure of the permanent exhibition is widely described as a “compromise” reached between right-leaning expellee associations and the Scientific Advisory Board of the Flight, Expulsion, and Reconciliation Foundation.

This board also includes historians, particularly from Poland and the Czech Republic.

This compromise had hitherto been maintained by the director of the Documentation Centre, the historian Gundula Bavendamm.

However, in mid-2024, expellee associations effectively abandoned this compromise and launched a fierce attack.

For instance, in a letter sent to Bavendamm by Bernd Fabritius (CSU), then president of the Federation of Expellees (BdV), it was stated that the connection between the resettlement process and Germany’s war of annihilation had to be severed, as this “confused context with causality”.

Fabritius also argued that the Federal Republic of Germany’s 1990 recognition of Poland’s national borders should not legally be characterised as a “cession” of the former eastern territories of the German Empire.

This statement recalls that the border treaty between the Federal Republic of Germany and Poland merely “confirmed” the border between the two states, described it as “inviolable”, and renounced all “territorial claims”.

The treaty contains no unconditional recognition definitively describing the border as “inviolable”. As Fabritius’s statement implies, this situation could give rise to potential loopholes.

CDU/CSU influence in German expellee associations

The offensive launched by the expellee associations gained momentum following the change of government last year.

Initially, despite the unanimous objections of the Academic Advisory Board, this led to Documentation Centre director Bavendamm’s contract not being renewed in November 2025 and the post being advertised.

Close observers noted that not only the expellee associations played a role in this process, but also the Group of Expellees, Repatriates, and German Minorities within the CDU/CSU parliamentary group in the Bundestag, which is closely linked to them.

The leader of this group, Klaus-Peter Willsch (CDU), is a member of the board of trustees of the Flight, Expulsion, and Reconciliation Foundation.

Similarly, Stephan Mayer, deputy chairman of the Expellees Group who took over the BdV presidency from Fabritius, is also a member of this board.

The person they sought to appoint as director of the Documentation Centre to replace Bavendamm was Sven Oole.

Critics had noted that Oole had “no managerial experience in German museums” and had produced no “academic publications” on the subject, but that “as the long-time managing director of the ‘Group of Displaced Persons’, he knew the group’s historical-political goals like the back of his hand”.

Oole’s candidacy failed due to threats from the Scientific Advisory Board that it would resign en masse if he were elected.

In the end, Roland Borchers was selected, but it is said that no one knows “where he intends to lead the foundation”.

Attempts to define Germans as a community based on descent

However, the substance of Borchers’s work is likely to be severely curtailed by the new law on the Flight, Expulsion, and Reconciliation Foundation, which was adopted by the federal government in July and submitted to the Bundestag in mid-August.

The Association of German Historians (VHD) directed sharp criticism at this legislation in late May. This criticism stems partly from the fact that Bernd Fabritius, in his role as Federal Government Commissioner for Matters Related to Ethnic German Resettlers and National Minorities, will in future hold an additional seat on the foundation’s board of directors.

According to the VHD’s statement, this will effectively give the BdV “a government-backed majority position on the foundation’s supervisory board”.

In its statement, the VHD explicitly warns against “bad examples of a state-directed remembrance policy”.

Furthermore, the statement contends that the new law focuses the foundation’s work to a certain degree on “German suffering” and replaces “the historical context of flight and expulsion with a self-referential national narrative”.

This situation further exacerbates “existing threats to reconciliation efforts, particularly with the Federal Republic’s Eastern European neighbours, especially Poland and the Czech Republic”.

Finally, the statement notes that, diverging from the openness of recent years, the law “once again defines Germans as a community based on descent”.

No immigration to Germany—except for “ethnic Germans”!

The historian Felix Ackermann also recently addressed the broader political context.

According to Ackermann, the new law aims not only to strip the resettlement process of its historical context and confine commemorative activities to a narrow national framework.

In addition, the federal government is moving the Flight, Expulsion, and Reconciliation Foundation from the purview of the Federal Government Commissioner for Culture and the Media to the remit of the Federal Ministry of the Interior.

Christoph de Vries, Parliamentary State Secretary at this ministry and deputy chairman of the Expellees Group within the CDU/CSU parliamentary group in the Bundestag, is also pushing for “the opening of new immigration channels for ethnic kin”.

Indeed, while politicians such as de Vries advocate strict restrictions on immigration, the Federal Ministry of the Interior seeks to revise immigration regulations for members of German-speaking minorities in Eastern Europe and Central Asia.

This revision would allow even German speakers born after 31 December 1992 to obtain German citizenship.

As Ackermann noted, this dual focus on the concept of “Germanness” makes it possible to describe the expulsion regions, just as during the Konrad Adenauer era, as the whole of the “German East”.

The fact that the “responsibility to preserve the history of the German East” now falls once again to the Federal Ministry of the Interior—which, as is well known, is responsible for domestic and not foreign affairs—seems to Ackermann “like a bad joke”; yet, Ackermann says, in reality this situation “brings terrible consequences.”

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German ruling parties urge EU to act against Chinese overcapacity

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Parliamentary groups of Germany’s ruling CDU-SPD coalition have called for stronger European protection against “unfair competition” and concrete measures to support car manufacturers.

According to Reuters, parliamentary sources indicated that these proposals primarily target China’s “overcapacity”, although China was not explicitly mentioned in the document obtained by Reuters.

The document called for a “decisive” response against “market-distorting practices and unfair competition”, including a faster and broader deployment of anti-dumping and anti-subsidy measures at the EU level.

This development comes as German industry steps up pressure on Chancellor Friedrich Merz to take a harder line against Beijing.

This also marks a shift in a country that has long resisted trade barriers for fear of Chinese retaliation.

According to one demand, once the German government develops local content criteria that comply with EU law and can be harmonised across the bloc, these criteria should be incorporated into Germany’s existing electric vehicle subsidy scheme, addressing concerns that taxpayer-funded German incentives are also supporting imported Chinese electric cars.

To support the country’s automotive industry, the parliamentary groups asked the European Commission to allow plug-in hybrids, range-extender electric vehicles, and highly efficient internal combustion engine vehicles alongside battery-electric vehicles beyond 2035.

The parties also called on Brussels to suspend plans to tighten the so-called “utility factor” metric used in calculating plug-in hybrid emissions from early 2027.

Under current plans, carmakers will need to sell significantly more electric vehicles starting in 2027 to meet mandatory fleet CO2 targets.

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