Common Stock Exchange

"There is a strong preference for a European development," Steinbrück said after talks with his Italian counterpart in Berlin.

The two ministers said, however, that a decision rested with the owners of Deutsche Börse, the German stock exchange in Frankfurt, the Italian exchange in Milan and the four-nation Euronext exchange, all of which are private companies.

But "at least politically, we want to support a development which we believe will strengthen Europe as a financial market," Steinbrück said.

A common stock exchange is needed

Padoa Schioppa argued that the euro area needed a common stock exchange and it was time to make progress on the issue.

"It is natural for a single currency area to have a single exchange," he said.

But Steinbrück expressed "great caution" as to whether such progress could be made in 2006.

Steinbrück said the issued needed to be discussed with French Finance Minister Thierry Breton, whose country's bourse is part of Euronext, along with the Amsterdam, Brussels and Lisbon exchanges.

The French-dominated Euronext turned down an offer from Deutsche Börse in May and agreed to be acquired by the New York Stock Exchange for 8 billion euros ($10.2 billion).

Breton is reportedly opposed to the trans-Atlantic tie-up, which has drawn criticism from some Euronext shareholders who prefer an all-European deal.

A recent report by Europlace, a business organization representing many of the largest French corporations quoted on Euronext, said the European exchange operator should seek a European consolidation before pursuing the NYSE venture.