In a speech in Vienna, Isabel Schnabel, Executive Board member of the European Central Bank, argued that Europe is not in decline but must unlock the full potential of its Single Market to compete in a rapidly changing global economy.
Speaking at the Austrian Academy of Sciences, Schnabel challenged the narrative of European stagnation, highlighting the continent’s high quality of life, strong democratic institutions and social protection systems. She noted that differences in GDP per capita compared with the United States partly reflect fewer working hours and more equal income distribution, rather than simply weaker productivity.
However, she acknowledged that persistently low productivity growth remains a key concern, driven by limited scale, fragmented markets and slower adoption of new technologies. Europe, she argued, does not lack ideas or talent, but scale.
A central proposal in her speech was the creation of a “28th regime” – a unified, EU-wide corporate legal framework that would allow companies to operate seamlessly across member states under a single set of rules. Such a regime, recently referred to as “EU Inc.” by European Commission President Ursula von der Leyen, would make it easier for firms to scale up, attract investment and remain in Europe rather than relocating abroad.
Schnabel stressed that deeper integration of capital markets, stronger domestic investment and structural reforms – particularly in countries like Germany – are essential to boosting growth and safeguarding Europe’s long-term prosperity.
She concluded that establishing a true “Made in Europe” brand through a more frictionless Single Market would strengthen innovation, productivity and Europe’s global competitiveness in an increasingly fragmented world.
