Germany's CSU says it will push ahead with European stock exchange plan

• The CSU issued a draft paper backing the European bourse plan ahead of party meetings in Seeon starting Tuesday
• Key supporters include ECB President Christine Lagarde, German finance minister Lars Lindner, and Bundesbank president Joachim Nagel
• Proponents argue fragmented European markets with different exchanges and regulations disadvantage the EU compared to the unified US market

Germany's Christian Social Union (CSU), sister party to Chancellor Friedrich Merz's Christian Democratic Union (CDU), announced Saturday it will champion the establishment of a unified European stock exchange, with ambitions to headquarter it in Germany.

According to an internal CSU draft document obtained by Reuters ahead of the party's three-day meetings beginning Tuesday in Seeon, Bavaria, the party stated: "We support the strengthening of European capital markets and a European bourse in order to keep successful German companies in the country."

The CSU emphasized its intention to "take on a clear leadership role in this process" and ensure the European exchange headquarters would be located in Germany, the EU's largest economy. Chancellor Merz initially proposed the plan in October 2024, positioning it as a strategy to strengthen Europe as a business location.

The initiative has garnered support from key financial leaders, including European Central Bank President Christine Lagarde, German Finance Minister Lars Lindner, and Bundesbank President Joachim Nagel.

Proponents argue that Europe's fragmented market structure—featuring multiple exchanges operating under different regulatory frameworks and supervision—places the EU at a significant competitive disadvantage compared to the United States' centralized New York Stock Exchange. This fragmentation is cited as a primary factor limiting initial public offerings (IPOs) in Europe, as local liquidity pools remain insufficient.

The unified exchange proposal aims to consolidate European capital markets, enhance liquidity, and improve the continent's ability to retain successful companies and attract new listings. The plan represents a strategic response to concerns about European competitiveness in global financial markets and the ongoing challenge of companies choosing to list outside the EU.