Analysis: Germany's CSU Backs Single European Stock Exchange Plan for Market Consolidation

This analysis is based on the Reuters report [1] published on January 3, 2026, announcing Germany’s Christian Social Union (CSU) support for Chancellor Friedrich Merz’s plan to establish a single European stock exchange. European stock markets currently suffer from significant fragmentation, with over 300 trading venues and 25 authorized Central Securities Depositories (CSDs) [2], a issue ECB President Christine Lagarde has criticized for draining liquidity, reducing listing attractiveness, and pushing firms to seek capital abroad [3].

The CSU’s backing—from the sister party of Merz’s CDU, which won the 2025 German election [8]—adds critical political momentum to the initiative. The current competitive landscape features three major players: Euronext (operating Amsterdam, Paris, Brussels, Dublin, Lisbon, Oslo), Deutsche Börse (Frankfurt), and the post-Brexit London Stock Exchange Group (LSEG) [0]. Euronext has expressed support for the plan, with its CEO noting interest in merging with Deutsche Börse to lead consolidation [5]. This follows prior consolidation efforts, including Euronext’s 2025 acquisition of the Athens Exchange (ATHEX) [7].

A unified exchange could enhance market efficiency by reducing fragmentation [3], improve European competitiveness against dominant global exchanges (NYSE, Nasdaq, Shanghai) [0], and restructure the financial value chain—requiring CSD integration [2] and offering European companies better access to capital and higher valuation multiples [0].

1. Political alignment as a catalyst
   : The CSU’s support elevates the plan from a German proposal to an EU-level priority with strong political backing, leveraging the CDU/CSU’s electoral mandate and influence in EU decision-making.
2. Potential market dominance
   : A merger between Euronext and Deutsche Börse could create a dominant European exchange, reducing competition among national players and establishing a more formidable global competitor.
3. Competitiveness and growth link
   : The initiative directly addresses a critical barrier to Europe’s ability to compete for listings and capital globally, tying financial market reform to broader economic growth objectives.

• Enhanced liquidity and lower transaction costs for investors [3]
• Improved access to capital and valuation multiples for European companies [0]
• Strengthened European financial infrastructure to rival US and Asian exchanges [0]

• Lack of political consensus across EU member states due to competing national exchange interests
• Regulatory harmonization challenges across diverse EU financial frameworks [4]
• Marginalization or acquisition risk for smaller regional exchanges [0]
• Uncertain market acceptance from investors and companies during the transition

On January 3, 2026, Germany’s CSU backed Chancellor Merz’s plan for a single European stock exchange to address market fragmentation. The initiative builds on prior consolidation efforts and official calls to strengthen Europe’s financial competitiveness. Major exchange operators like Euronext and Deutsche Börse (DB) could benefit from increased scale, while European companies and investors may gain from improved market efficiency. However, the plan faces significant hurdles, including political consensus, regulatory alignment, and market acceptance. This analysis provides objective context for stakeholders evaluating the initiative’s potential impact on European financial markets.