IT HAD been billed as a bridge between Europe’s two main financial hubs. It has become, however, a symbol of their growing competition—and of the uncertainty into which Brexit has plunged the EU’s markets. A planned merger between Deutsche Börse (DB) and the London Stock Exchange (LSE), both listed companies, seems on the verge of collapse. This week the LSE rejected the latest demand of the European Commission (EC) to sell parts of its business to allay competition concerns.

The €29bn ($30bn) merger was first announced a year ago and is the companies’ third attempt to join forces since 2000. It brings together the operators of the British, German and Italian stock exchanges, as well as some of the largest clearing-houses in Europe. Before it would approve the deal, the EC launched an investigation into its impact on competition. Last September it identified a number of concerns, including about the derivatives market once the clearing-houses merged. In early February the LSE sought to ease that concern by confirming the sale of its Paris-based clearing unit, LCH.

Not good enough, the EC countered a few weeks later: the sale of LCH would not boost competition, because the LSE also owned MTS, an Italian electronic-trading platform for bond and repo markets, which could direct trades away from LCH and towards other clearing-houses in the new, merged company. So the commission in the LSE’s words “unexpectedly” made a “disproportionate” demand: that MTS also be sold off. The LSE refuses. The EC is due to make a decision on the deal by April 3rd; unless it changes its position, the merger seems doomed.

The latest roadblock may appear to be about competition. But politics lurks close to the surface. National pride is at stake: DB and the LSE operate stock exchanges regarded as iconic institutions in Germany and Britain. The vote in Britain to leave the EU has raised the stakes. Under the terms of the deal, agreed on before the referendum and since approved by shareholders, the merged company’s headquarters would be in London. But now that Britain is leaving the EU, the German state of Hesse argues there is a clear case for moving them to DB’s home city, Frankfurt.

Inevitably, this has prompted suspicions that the EC has been put under pressure to be tough on the LSE, either by the Germans, or even by the French, who may want to thwart the rise of Frankfurt as a post-Brexit alternative to London. It has not helped that Carsten Kengeter, DB’s chief executive and the intended boss of the merged concern, lives in London and is seen as an Anglophile, or that German prosecutors are investigating allegations of his insider dealing before the proposed merger was made public—a charge both he and DB’s supervisory board dismiss.

The British government has been relatively quiet about the deal. Some politicians nonetheless express concern that the merged company’s headquarters might move to Germany, taking euro-denominated clearing with them. But, argue supporters of the deal, relocation would not be so easy: a 75% majority of the new company’s board would need to approve it. Since the separate entities within the merged company would continue to be supervised by national authorities, any future move would need regulatory approval. And in any case, the fate of euro-denominated clearing could well be determined not by the companies but by regulators and the Brexit negotiations.

The LSE says it remains convinced of the benefits of the merger. But it seems to accept that the deal is destined to collapse. Even if the EC hurdle is cleared, others loom. Supervisors in both Hesse and Britain are yet to bless the union. The LSE says it can stand on its own. Its share price fell only a little on news of the merger’s troubles. It was perhaps buoyed by the prospect of a rival suitor. The American-owned Intercontinental Exchange may be waiting in the wings; it expressed interest last year, and the fall in sterling since makes the LSE a cheaper buy. Bridges across the channel are hardly in vogue in Britain these days. The Atlantic, anyone?