Germany-based Commerzbank's CEO-in-waiting, Bettina Orlopp, met virtually Friday with bankers from Italy’s UniCredit, Reuters reported, citing two people with knowledge of the matter.

Talks were constructive but didn’t discuss a merger, people familiar with the matter told The Wall Street Journal.

It was unclear whether UniCredit CEO Andrea Orcel attended Friday’s call. At a banking conference Wednesday in London, he took care to label his bank’s rapidly growing stake in Commerzbank as “an investment and nothing else.” But he acknowledged he sees a combination as the best outcome.

Analysts at Citi, too, have cited it as the most likely one, according to a Thursday note to clients seen by Bloomberg.

That has put the eyes of Europe’s banking sector squarely on the chess match between the two lenders in Frankfurt and Milan.

“This transaction would really be the most important cross-border M&A that we've seen in Europe,” said Luca Evangelisti, investment manager and head of credit research at Jupiter Asset Management, according to Reuters.

Officials, including European Central Bank President Christine Lagarde, have said cross-border deals in Europe “are desirable” so banks on the continent can compete with Wall Street and Chinese lenders. (Lagarde, however, hedged that her comments shouldn’t be taken as intervention on any specific deal, according to Reuters.)

Ask UniCredit and Commerzbank’s peers, though, and one may get varying reasons as to why European banks fall short.

BNP Paribas CFO Lars Machenil said the issue lies in number.

“If I would ask you, how many banks are there in Europe, your right answer would be too many,” Machenil told CNBC on Thursday.

But BBVA CEO Omur Genc asserts the problem is technology — specifically, the soaring cost of it makes it difficult for banks to gain enough scale to compete globally without looking outside the borders of a bank’s home country.

None of the world’s 20 largest banks by market capitalization are from the euro zone, Genc told Reuters. Further, the market valuation of Europe’s 50 biggest banks combined equates roughly to the valuation of the five largest in the U.S., according to the Financial Times.  

Genc’s BBVA has first-hand knowledge of an arduous M&A slog. The Spanish bank in April appealed directly to the shareholders of its domestic rival, Sabadell, to buy the lender for roughly €12 billion and create a bank with more than €1 trillion in assets.  

Genc said the takeover was “moving according to plan” and that BBVA expects to receive a green light from Spain’s competition authority in less than two months, and for the tie-up to be complete early next year.

“If our deal doesn't happen, or that [UniCredit and Commerzbank] deal doesn't happen, it's going to be bad,” Genc told Reuters. “We will lose an amazing opportunity to create some European banks who have scale enough to better invest in technology.”

Machenil, too, said cross-border M&A is “still a bit further away” than run-of-the-mill domestic consolidation, in part because of differing systems and products.

“A bank that is based in one country only and based in another country only, that economically doesn’t make sense because there are no synergies,” he said.

Commerzbank — and Germany as a whole — have been less than receptive to UniCredit’s advances.

“We don’t want this,” Commerzbank’s deputy chair, Uwe Tschaege, said Tuesday.

The bank’s board members named Orlopp their next CEO and issued more ambitious growth targets Thursday in the face of a potentially hostile takeover by the Italian bank.

UniCredit this month bought a €700 million bloc of Commerzbank shares the German government was offloading in a market placement. Then the Italian bank entered derivatives contracts to extend its stake in the German lender to 21%.

The German government last week said it would not sell any further stakes of Commerzbank. But legally, a government source told Reuters, there’s not much else it can do to stop a takeover.

The Foreign Trade and Payments Ordinance, which can be used to prevent takeovers from non-EU countries, doesn’t apply because banks are under the supervision of the European Central Bank, sources told the wire service.

“Andrea isn’t naive, he’s a tactician and I think he’s well aware of what he’s doing,” former UniCredit CEO Alessandro Profumo, told the Financial Times. “He knows exactly how he plans to reach his end goal. ... We may not know exactly, but he does.”