European market operator Euronext should pursue mergers with rival exchanges in the US, Germany and Italy, according to a report by Paris Europlace, a lobby group of the biggest French firms.
The report also calls for German exchange Deutsche Börse to sell its cash equity business to Euronext in return for a minority stake - around 15-20% - in the pan-European exchange.
According to press reports, Henri Lachmann, author of the study on exchange consolidation, says Euronext should still complete its agreed merger with the New York Stock Exchange (Nyse) but only after it has acquired the German equity market and merged with Italy's Borsa Italiana.
This would address concerns about Euronext being absorbed by its Frankfurt-based rival Deutsche Börse and give Euronext more power to negotiate on a level footing with Nyse and prevent control of European markets moving to the US.
According to a Reuters report, Euronext has welcomed the idea of Deutsche Börse transferring its cash activity in exchange for shares in its business.
The scenario would also allow Borsa Italiana to cash in the rapid consolidation of Europe's stock exchanges. The board of Italy's stock exchange is expected to meet today to consider plans to build a pan-European exchange involving Deutsche Börse and, possibly, Euronext.
Last month Massimo Capuano, the chief executive of Borsa Italiana, outlined a EUR21.5bn proposal to merge the Italian market with both Euronext and Deutsche Börse to create a pan-European super exchange.
However Euronext shareholders are due to vote on a proposed takeover by the New York Stock Exchange in December. The European exchange agreed a $10 billion - or EUR7.8 bn - deal from Nyse in May, ousting a rival bid by Deutsche Börse.