Berlin faces a test as German telecom giant Deutsche Telekom considers a merger with U.S. carrier T‑Mobile, a deal that could reshape the continent’s wireless market. The bid would create a powerhouse worth roughly €70 billion, with the combined entity headquartered in a low‑tax jurisdiction such as Luxembourg. Berlin’s government, a 14 percent shareholder, has kept its reaction muted.

In a parallel move, Italy’s Monte dei Paschi di Siena chief Luigi Lovaglio eyeed a €7.4 billion stake sale in Generali to bankroll an acquisition of Banco BPM, reviving the state’s earlier plan to pair the banks into a national champion. The deal would elevate the Italian lender to a top‑tier European player, a goal championed by Brussels.

The German case contrasts with Chancellor Friedrich Merz’s warning that UniCredit’s €35 billion push for Commerzbank was “hostile”. While Brussels signals a pro‑merger agenda, Berlin has shown reluctance to cede control of key assets. The outcome will test whether German policy will back cross‑border consolidation or protect domestic interests.

Meanwhile, Japan’s recent veto of South Korean private‑equity firm MBK Partners’ ¥274 bn ($1.7 bn) bid for Makino Milling underscores a tightening security stance. The move follows years of Japan courting foreign investors while guarding defence‑related technology. The decision may dampen future cross‑border deals, signalling that national security concerns can override market logic.