Milan have not gone beyond the quarter-final stages since winning the Champions League in 2007 while Inter, who won the competition in 2010, have failed to qualify for Europe's premier tournament for the second successive season.
Raiola believes somewhat contentiously that the best way to restore Italian dominance in Europe is for the two arch rivals to merge.
“The situation Italian football finds itself in is difficult,” he told Gazzetta.it.
“Milan and Inter, instead of competing against one and other, they should join forces.
“Lazio and Roma could have one strong club, rather than only two weak ones.”
However, Milan CEO Adriano Galliani came to the defence of his club, insisting a merger is not necessary.
“Raiola’s hypothesis to merge Milan and Inter to be more competitive might be a good idea, but never mind, we are already so strong.”
The Rossoneri finished in third place in Serie A this season and will have to go through qualifying if they hope to reach the Champions League group stage.
The Nerazzurri on the other hand had a very disappointing season, finishing ninth and missing out on Europe altogether.
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