Schnabel: Europe's Single Market key to unlocking scale and growth

Europe is often portrayed as a continent in decline, but this narrative is misleading, Schnabel stated.

By many measures, Europe offers a high quality of life, underpinned by strong institutions, social protection, and an exceptional capacity to adapt.

Happiness and life satisfaction consistently rank among the highest globally, reflecting secure, fulfilling lives.

Health outcomes are particularly revealing; a child born in Spain or Italy can expect to live over five years longer than one in the United States, despite higher US healthcare spending.

Europe's commitment to democracy, rule of law, and institutional checks and balances also fosters trust and policy credibility, giving citizens confidence in their future and the fairness of society, even amidst global geopolitical shifts and rising autocratic rule.

Europe's societal choices, while fostering better life outcomes, have contributed to a GDP per capita gap compared to other advanced economies.

This disparity largely stems from Europeans working fewer hours—approximately 40 days less annually than Americans.

Schnabel noted that if working hours were comparable, euro area real GDP per capita could be 21% higher, closing two-thirds of the current income gap.

Additionally, European growth is more inclusive, with income gains less concentrated at the top.

Despite these advantages, persistently weak productivity growth in the euro area poses a significant threat to sustained economic expansion and closing long-term prosperity gaps, making it a key policy priority.