CSU Pushes Merz’s Vision of a Single European Stock Exchange, Framing It as a Fight for Capital, Listings, and Influence

Germany’s conservative Christian Social Union (CSU) has moved to formally back Chancellor Friedrich Merz’s proposal for a single European stock exchange, elevating the idea from a broad political ambition into a concrete strategic priority for Europe’s largest economy.

The party is positioning the plan as both an economic necessity for the European Union and a national interest for Germany, arguing that fragmented capital markets are steadily eroding Europe’s ability to finance growth, innovation, and globally competitive companies.

In a draft internal paper obtained by Reuters, the CSU said it would support efforts to strengthen European capital markets through the creation of a unified bourse, with the explicit goal of keeping successful German companies listed within Europe. The paper leaves little doubt about the party’s ambitions, stating that Germany should take a leadership role in the process and host the headquarters of any future European exchange.

“We support the strengthening of European capital markets and a European bourse in order to keep successful German companies in the country,” the document said. It added that the CSU intends to “ensure that the headquarters of a European bourse are located in the European Union’s biggest economy, Germany.”

The paper was circulated ahead of three-day party meetings beginning on Tuesday in Seeon, a Bavarian town that often serves as a setting for high-level CSU strategy discussions. The timing suggests the party wants the proposal firmly embedded in its broader economic agenda, as Merz seeks to define his chancellorship around competitiveness, investment, and Europe’s place in the global economy.

Merz first unveiled the idea in October, arguing that Europe’s capital markets are structurally too weak and too divided to support companies at scale. His argument taps into a long-running debate in Brussels, Frankfurt, and Paris about why Europe struggles to produce and retain global champions, particularly in technology and other capital-intensive sectors.

While Europe has a large pool of savings, policymakers have repeatedly warned that those funds are poorly channeled into productive investment because capital markets remain national, shallow, and complex.

Backing for deeper integration has grown steadily among senior officials. European Central Bank President Christine Lagarde has said that more unified capital markets are essential if Europe is to mobilize private investment, especially as public finances are under pressure and governments are expected to fund green and digital transitions. German Finance Minister Lars Klingbeil and Bundesbank President Joachim Nagel have also spoken in favor of closer market integration, seeing it as a way to reduce Europe’s reliance on bank lending and to create a more resilient financial system.

Supporters of a single exchange point to the stark contrast with the United States. U.S. companies benefit from a dominant, highly liquid market centered on the New York Stock Exchange and Nasdaq, operating under a single regulatory framework. This concentration of capital attracts global investors and makes it easier for firms to raise large sums quickly.

In Europe, by comparison, listings are spread across multiple national exchanges, each governed by different rules, supervisory regimes, and market practices. That fragmentation, advocates say, dilutes liquidity, increases costs, and leaves European firms at a disadvantage when competing for global capital.

European exchange operators themselves have warned that this structure is hurting the continent’s ability to attract initial public offerings. Lower liquidity often translates into lower valuations, making European listings less appealing, particularly for fast-growing companies that need scale and visibility. The result has been a steady flow of European firms either postponing IPOs or choosing to list in the United States, a trend that has alarmed policymakers in Berlin, Paris, and Brussels.

For Germany, the issue carries added weight. As Europe’s largest economy, it has a strong interest in maintaining Frankfurt’s status as a major financial center and in keeping high-growth companies anchored in the region. The CSU’s insistence that Germany should host the headquarters of a European bourse signals concern that, without a decisive move, influence could drift toward other financial hubs or outside Europe altogether.

At the same time, the proposal faces significant political and practical challenges. National exchanges and regulators may be wary of losing authority, while smaller financial centers could fear marginalization. Creating a single bourse would require harmonizing listing standards, supervision, and market infrastructure across the EU, a process that would test political will and institutional coordination.

Even so, the CSU’s endorsement underlines a growing sense among Europe’s political leadership that incremental reforms may no longer be enough. With global capital increasingly gravitating toward large, unified markets, advocates of Merz’s plan argue that Europe must think and act on a similar scale. For them, a single European stock exchange is not just a financial reform, but a statement about Europe’s ambition to compete, invest, and grow on its own terms.