As the article explains, MMFs in the EU are very small relative to deposits. Competition in the EU is limited because of the important political role that banks play (if people do move their money en masse out of banks, it will have political consequences as well as economic...there would be no option but to bail everyone out).
Basically it's why bother with a money market fund earning 0.5% when your capital up to €100k is guaranteed at 0% interest. 0.5% is simply not worth the risk.
The mmf offering of my bank is covered by the public depositors insurance. It's also more like 1% interest, and other (similarly covered) banks have better rates. Still not a lot, obviously.
