Europe's stock markets face liquidity challenges as shares trade at half the volume of comparable US groups. With shares changing hands on 35 bourses and trading venues exceeding 40, fragmentation creates costs and complexity despite professional traders accessing all markets via one screen. Euronext chief Stéphane Boujnah has reignited calls for a "big bang" merger with rival Deutsche Börse, arguing that combining exchanges like Paris and Amsterdam would broaden investor horizons beyond home markets.

Larger exchanges could also invest in superior technology to compete with alternative trading venues. Currently, these alternatives account for 70 percent of European stock trading versus 45 percent in the US, according to Oliver Wyman. A merged approach would simplify access for US investors seeking diversification beyond their tech-centric markets, requiring only one new set of trading rules to access numerous European companies.

However, seamless trading requires merging not just trading systems but also clearing and settlement infrastructure. Currently, a German investor pays more for clearing when buying Italian stocks than domestic ones, with European post-trade costs potentially twice as high as in the US. While the "capital markets union" dream of a bloc-wide standard remains distant, even a handful of mergers would improve liquidity and competitiveness for the region's financial markets.