“There are too many small providers of ETFs and too many of the same products in Europe, leading to fragmentation, and smaller players should look to consolidate,” Joe Linhares, head of EMEA at Blackrock’s iShares, the world’s largest asset manager and ETF provider, told Reuters.

Previously, European ETF assets grew by a compounded growth rate of 50% a year in 2005-2009, followed by a 25% jump in 2010. New figures from the ETFGI state that net new assets entering European ETFs in the first five months of 2012 are at 2% of the previous year-end’s levels, whereas in the US they are a much healthier 6%. This now puts Europe behind the U.S. from an ETF growth standpoint, a reversal of fortune for the EU.

It is apparent that the moves by the Spanish central bank over the past weekend has done little to stop the pain from spreading throughout the Eurozone. A $125 billion proposal did little to restore faith in European financial markets, and in turn, for the European ETF market. [Greece ETF Braces for Election After Spanish Bank Bailout]

Tisha Guerrero contributed to this article.