The failed partnership between Italy’s Generali and France’s BPCE is more than a collapsed deal in European asset management. It exposes how challenging it remains for Europe to build financial scale once a project becomes truly cross-border, and how protectionist reflexes, legal uncertainty and unfinished integration can combine to smother a transaction.
In Brussels and national capitals, policymakers regularly underscore the need for European financial champions. At the same time, European politics remains deeply divided over how far integration should go, hampering implementation. Ambitions become entangled in legal procedures, national interests and an integration process that has stalled halfway.
The project itself was straightforward. Generali Investments Holding and Natixis Investment Managers, part of BPCE, planned to set up a joint venture headquartered in Amsterdam. With around 1,900 billion euros in assets under management, annual revenues of 4.1 billion euros and roughly 6,500 employees, the combined platform would have ranked among Europe’s largest asset managers. By revenue, it would even have overtaken market leader Amundi, part of Crédit Agricole, although Amundi remains Europe’s largest asset manager by assets, with about 2,200 billion euros under management.
Global competition
The timing was no coincidence. In a world where US asset managers such as Blackrock and Vanguard are becoming ever more dominant, scale has become a prerequisite for competitiveness. Pressure to consolidate is also rising within Europe. Against that backdrop, the Generali–BPCE deal stood out as a rare attempt to build European scale beyond familiar national frameworks.
That the project was abandoned on December 11 is telling. In a joint statement, Generali and BPCE said that “the conditions to reach a final agreement are not currently present.” At the same time, both groups stressed that they “maintain their commitment to the development of a thriving financial industry with globally competitive European champions contributing to the region’s economic success.”
The formal explanation underscores the tension that characterizes such projects. On one hand, the ambition to create European scale remains intact. On the other, the environment in which financial institutions operate has become structurally hostile to cross-border growth in practice.
A hybrid problem
What emerges is not a single cause, but a hybrid problem. Political caution, legal uncertainty and the way European regulation is implemented are tightly intertwined. They reinforce one another, making it difficult to clearly separate cause and effect. In such an institutional tangle, decisive action becomes structurally difficult.
Both Lorenzo Codogno, former chief economist at Italy’s Treasury, and former ECB supervisor Ignazio Angeloni see a renewed form of protectionism at work in this dynamic. No longer aimed only at external competition, it increasingly operates within Europe itself. National interests, supervisory cultures and legal instruments are once again being used to retain control over domestic financial systems.
“The mood globally has changed,” Codogno told Investment Officer. “It is protection, protection, protection.”
That protectionist shift is also reflected in the way capital and liquidity are still organized largely along national lines. Despite years of debate about completing the banking union, cross-border mergers remain unattractive, precisely because Europe is still not institutionally ready for financial champions. Capital cannot be freely deployed within international groups, supervisors remain nationally anchored and political support evaporates once integration becomes concrete. It is at these pivotal moments that political caution and protectionist reflexes resurface. The result is a system that rewards prudence and discourages scale.
Shifting dynamics
In Generali’s case, a specifically Italian dimension added to these structural constraints. According to Angeloni, the deal would likely have gone ahead had control dynamics at Generali not shifted.
“That combination would probably have gone ahead had not Banca Monte dei Paschi di Siena succeeded in taking over Mediobanca,” Angeloni said in an interview.
Through that takeover, major shareholders Delfin and billionaire businessman Francesco Caltagirone gained greater influence over Generali, fundamentally altering the insurer’s ownership structure and strategic room for maneuver. That shift subsequently became entangled with a judicial investigation into the privatization of Monte dei Paschi.
Formally, the judicial probe has nothing to do with the Generali–BPCE deal. Yet its legal shadow, Angeloni argues, was sufficient to severely constrain strategic decision-making.
He even considers it possible that the investigation reflected protectionist thinking within government circles. “The ongoing judicial investigation into the privatization of Monte Paschi suggests that one of the government’s objectives as part of its whole intervention strategy was precisely to block that combination between the two asset managers,” Angeloni said, adding a reference to Germany’s resistance against Unicredit’s earlier plans to acquire Commerzbank. “Although the two events are different in time and motivation, they both go in the same direction of strengthening nationalism in Europe’s banking and organizing its structure along strict domestic silos.”
Entrenched fragmentation
European regulation itself further entrenches fragmentation. Supervision is largely European in design, but responsibility remains national. For supervisors, cross-border structures are seen as more complex and riskier than domestic ones. For banks and asset managers, that makes scale difficult to achieve. For investors, it translates into lower returns and fewer competitive European players.
Other countries are no exception. Spain has imposed strict conditions on bank mergers. Germany has politically backed Commerzbank in the face of interest from UniCredit. Italy actively deploys its so-called golden powers to protect strategic interests. The pattern is consistent: national reflexes repeatedly override European logic.
Still room for progress
Have all efforts toward advancing Europe’s champions ground to a halt ? Nicolas Véron, senior fellow at the Brussels-based think tank Bruegel, believes that conclusion would be too bleak. In his view, the European Union is not paralyzed.
“The EU in the last decade has been able to make very important decisions,” Véron said, pointing to the creation of the single supervisory mechanism and recent advances in anti-money-laundering oversight. “The current treaties are working well enough.”
The real constraint, according to Véron, lies in political will. In countries where financial services are a major pillar of the national economy, the willingness to relinquish control remains limited. Integration therefore proceeds through incremental steps and uneasy compromises rather than bold leaps forward. In capital markets and asset management, some room for gradual progress remains, but even there, scale will remain a promise rather than a reality without political backing.
The Generali–BPCE episode illustrates how Europe continues to stand in its own way when it comes to building financial scale. Not for a lack of capital, expertise or ambition, but because an institutional framework designed to prioritize stability still comes at the expense of dynamism. As long as national interests outweigh European scale, financial champions will remain no more than a political aspiration.