The German government is adamant that Frankfurt should play a "decisive" role in any tie-up between the stock market operators, rejecting attempts by France to move the merged company's headquarters to Paris.
Germany doesn't want a merged exchange moving from its Frankfurt home
"For us, Frankfurt is of decisive importance as a financial center," German Finance Minister Peer Steinbrück told the German news agency DPA in an interview.
In addition, the Deutsche Börse business model was highly successful, Steinbrück said in response to French objections to the so-called "vertical silo" structure of the Frankfurt exchange, incorporating the full range of activities from stock trading to settlement and clearing.
Steinbrück (photo) said that the different sizes of Euronext and Deutsche Börse, the bigger of the two because of its clearing activities, should be considered in any tie-up.
The successful Deutsche Börse model shouldn't be changed
"The market capitalization of Deutsche Börse must be taken into account in issues of headquarters and personnel," he said.
"Stand firm" against France
At the same time, the state premier of Hesse, Roland Koch, urged the German government to safeguard German interests in any possible merger. The business daily Handelsblatt quoted a letter from Koch to Steinbrück, in which the conservative politician urged the minister to "stand firm" against any attempts by France to weaken Deutsche Börse's position in a joint company.
A tie-up between Frankfurt and Euronext, which operates the Dutch, Belgian, French and Portuguese stock exchanges, "remains fundamentally a feasible option," Koch reportedly wrote. But only on the condition that the Frankfurt exchange, with its different divisions and employees, be "wholly safeguarded," Handelsblatt quoted Koch's letter as saying.
Koch is among the Germans making a case for Frankfurt
Koch's comments come in response to recent remarks by French Finance Minister Thierry Breton, who had said he wanted to play an "active role" in the talks regarding a tie-up of the European stock exchanges.
Talks between Euronext and Deutsche Börse have so far run aground on failure to agree on the site of the merged company's headquarters and on the future structure of the group. Euronext wants the clearing activities excluded from any merger, while Deutsche Börse refuses to abandon its integrated structure.
On Wednesday, Euronext announced that it had abandoned any thought of acquiring the London Stock Exchange, following Nasdaq's acquisition of a 15-percent stake in the venerable LSE. At the same time, Euronext said that it would continue talking to Deutsche Börse about a possible merger.