In a speech at the Economics Conference in Vilnius, European Central Bank Executive Board member Isabel Schnabel challenged the narrative of Europe in decline. She highlighted the continent's strong institutions, high quality of life, and capacity to adapt in times of crisis. Schnabel argued that Europe's true strength lies in its ability to unlock the full potential of the Single Market, which would provide the scale needed to convert innovation into economic growth.
Europe stands out globally for its quality of life, with strong social protection, accessible public infrastructure, and high-quality public education. Health outcomes in Europe are particularly impressive, with a child born in Spain or Italy expected to live five years longer than a child born in the United States, despite the U.S. spending a far larger share of GDP on healthcare.
Schnabel also addressed the transatlantic prosperity gap, noting that Europeans work fewer hours and enjoy more inclusive growth. However, she emphasized the need for sustained productivity growth to protect these advantages. The speech highlighted the success of southern euro area countries, which have transitioned from crisis economies to growth leaders, attracting record levels of investment and reducing unemployment.