For those who have been despairing at the lack of integration in European financial markets, this has been a good week. First came the announcement that Europe's banks have agreed on a roadmap to a single payment system by 2008. This was followed by the news of takeover bids for two Italian banks: by BBVA, Spain's second largest bank, for Banca Nazionale del Lavoro of Italy, and by ABN Amro, the Dutch bank, for Banca Antonveneta.

Takeover bids in this sector are good news because the eurozone badly needs them to achieve the dual goals of market integration and consolidation. In the banking sector the eurozone consists of 12 mercantilist states, each one jealously guarding its regulatory framework. Italy is among the more protectionist. Antonio Fazio, governor of the Banca d'Italia, the central bank, has the right to block any banking merger. He has a record of opposing foreign takeovers. Now he has to decide on two bids at the same time.