BANKING ON A SINGLE MARKET.

Most Europeans will welcome the ambitions of Charlie McCreevy to promote an integrated financial services market. But, paradoxically and conspicuously, his enthusiasm is not universally shared within the constituency on which progress depends - the financial services community itself.

The Internal Market Commissioner this week launched a new consultation on how best to provide the citizens of Europe with lower-cost banking, better pensions, and more attractive mortgage deals. And he wants to make sure that an effectively integrated market can make its contribution to jobs, growth and economic stability in Europe.

As he was making his announcement, however, letters were flying back and forth between Brussels and Rome over what appears to be a classic case of national resistance to integration in a crucial component of this sector. The obstacles that Spanish and Dutch banks are encountering in their bids to acquire shareholdings in Italian banks have been extensively reported on in Europe Information and elsewhere. The Commissioner depicted the tangled process as a soap opera, and admitted that these test cases "highlight the many difficulties" in achieving integration.

The notoriously limited degree of cross-border banking deals in Europe is due to many factors, but McCreevy himself concedes that many national supervisory authorities in the EU make clear that they do not welcome outsider stakes in national banks.

This reticence is a serious threat to any effective...