Europe Confronts a Fragmented Banking System and Costly Enlargement

Two questions about the European Union's financial future came up on the same day. In an opinion piece for Euronews, Frédéric Oudéa, chairman of Revolut Western Europe, argued that Europe should move beyond fragmented national banking markets and build pan-European champions capable of financing innovation, defense and the green transition. His premise is that a fragmented set of domestic banks cannot mobilize capital at the scale the bloc now needs.

At the same time, the cost of expanding the union is drawing scrutiny. Euronews reported that Montenegro's 3.2 billion euro accession package, while small relative to the bloc's overall budget, could set a precedent for how future enlargements are funded, complicating already tense negotiations.

The two issues share a common cause. Europe wants to finance defense, industry and new members, but its capital markets and banks remain divided along national lines, and its budget is contested. Deeper integration would raise the bloc's capacity to fund those ambitions, and every enlargement makes the integration question harder to defer.