Europe’s potential through a unified market and scale

Isabel Schnabel, Member of the Executive Board of the European Central Bank, delivered a speech at a lecture in memory of Eugen Böhm von Bawerk, organized by the Austrian Academy of Sciences.

She emphasized that Europe is experiencing a period of radical transformation driven by technological progress and geopolitical shifts. Despite narratives of decline, Europe maintains high quality of life, strong institutions, and social protections.

Schnabel argued that Europe’s key to future growth is unlocking the full potential of the Single Market. She proposed establishing a 28th regime— a unified European corporate framework— to provide firms with seamless access to the entire European market, enabling scale and fostering a strong ‘Made in Europe’ brand.

She highlighted Europe’s global leadership in quality of life, health outcomes, and democratic values, contrasting it with challenges such as lower GDP per capita, shorter working hours, and income inequality compared to the US.

The speech discussed regional disparities within Europe, noting the rapid growth of southern euro area countries like Spain, Portugal, and Greece, and the stagnation in core economies like Germany, which faces demographic and competitiveness challenges.

Schnabel emphasized that Europe’s innovation capacity is strong, with high research output and start-up creation, but scale remains an obstacle. The creation of a 28th regime— a unified corporate framework— could lower barriers, facilitate cross-border growth, and attract investment.

The proposed regime would be voluntary, digital, and applicable across all member states, helping European firms grow and stay competitive globally. It aims to boost productivity and address Europe’s long-standing issue of lacking scale, essential for sustainable prosperity.

In conclusion, Schnabel reaffirmed Europe’s potential, its leadership in quality of life and innovation, and the importance of scale. The 28th regime offers a concrete way to foster growth, innovation, and a strong European brand.