TL;DR
Speaking in Vilnius on 13 November 2026, ECB Executive Board member Isabel Schnabel argued that Europe’s economic challenge is a lack of scale, not a shortage of talent, ideas or research. She called for a “28th regime” to give firms easier access to the whole European market, saying it could help build a “Made in Europe” brand; the speech does not provide details of an adopted plan.
European Central Bank Executive Board member Isabel Schnabel called for a new “28th regime” to let firms operate more easily across the European Union, arguing that greater scale could help turn European research and innovation into growth. In a speech delivered in Vilnius on 13 November 2026, she said the proposal could help Europe compete as one economy and develop a “Made in Europe” brand. Her remarks were a policy argument, not an announcement that the regime has been adopted.
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Schnabel delivered the speech at an economics conference hosted by the Bank of Lithuania. She disputed the view that Europe is simply in decline, pointing instead to its quality of life, social protections and institutions. She argued that those strengths can support future economic performance, but that Europe needs to make better use of its Single Market.
Her central diagnosis was that Europe does not lack talent, ideas or research; it lacks scale. A 28th regime, she said, would give firms seamless access to the wider European market, helping them grow beyond the limits of operating across 27 national markets. The speech presents this as a way to convert innovation into economic growth, rather than as a guarantee that growth will follow.
Schnabel also cautioned against treating GDP per capita as a complete measure of prosperity. She said euro-area employees work about 40 fewer days per year, on average, than U.S. employees. A counterfactual in her speech estimated that matching U.S. working hours, while holding hourly productivity and employment rates constant, would raise euro-area real GDP per capita by 21% and close about two-thirds of the income gap. That is a modeled comparison, not a forecast or policy recommendation.
Scale Could Shape Europe’s Growth
The argument matters because European companies seeking to expand can face different rules and administrative requirements across national markets. Schnabel’s proposal puts market integration at the center of the debate over how Europe can compete in a period of rapid technological change and geopolitical shifts. If a common regime reduced barriers to cross-border activity, firms could potentially reach more customers and grow across the bloc more easily.
Her framing also broadens the discussion beyond productivity rankings. Schnabel argued that differences in working hours and income distribution affect comparisons between Europe and the United States. The figures in her speech suggest that a GDP-per-capita gap does not, by itself, explain differences in living standards or show that Europe’s economic model has failed. Still, better quality-of-life outcomes do not resolve the separate question of how to strengthen investment, productivity and business growth.
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Why Schnabel Focused on the Single Market
Schnabel’s speech set out two sides of her assessment. She described European strengths, including social protection, public services and democratic institutions, while acknowledging that euro-area GDP per capita is below that of some advanced economies. She said part of the gap reflects the fact that several eastern European economies are still catching up, while a substantial difference remains among more advanced euro-area countries.
She offered two further qualifications. First, working time affects total output: her comparison suggests that Americans work more days on average, while European choices around working weeks, vacation and part-time employment contribute to the gap. Second, she said income gains in the United States are more concentrated. In the figures cited in her speech, the top 10% receive about 37% of U.S. post-tax national income, compared with about 27% on average in the euro area. She also said more than a quarter of U.S. growth in value added per employee since 2000 accrued in information and communications technology, a sector accounting for under 2% of employment.
Design and Adoption Remain Open
The speech does not specify the legal design of the proposed 28th regime, which businesses would qualify, how it would interact with existing national rules, or what timetable might apply. It also does not announce a decision by EU institutions or member states. The proposal is therefore an argument for further policy action, not a confirmed new set of rules.
It is also unclear how much a common regime would reduce practical barriers to expansion or whether firms would respond by investing and hiring across borders. Schnabel’s GDP and income comparisons rely on the measures and assumptions described in her speech. Her working-hours calculation is explicitly a counterfactual, and should not be read as evidence that longer hours would produce the same result in practice.
Policy Debate on a Common Regime
The next step would be for EU policymakers to define whether and how a 28th regime could work. The speech itself sets out no formal timetable, legislative proposal or decision point. Any progress would depend on the content of a proposal and the response of European institutions and member states.
For now, Schnabel’s remarks add the case for a more integrated market to the wider debate about Europe’s competitiveness. Readers should distinguish that policy case from an enacted measure: no implementation plan is confirmed in the cited speech.
Key Questions
What did Isabel Schnabel announce?
She did not announce an adopted policy. In a speech on 13 November 2026, she argued that a “28th regime” could make it easier for firms to operate across the European market and grow to scale.
What does “28th regime” mean in the speech?
Schnabel used the term for a proposed framework that would give firms easier access to the whole European market alongside the existing national systems. Her speech does not set out its legal or practical details.
Why does Schnabel say Europe needs more scale?
She argued that Europe has talent, ideas and research but that businesses can struggle to grow across fragmented national markets. A larger effective market, in her view, could help turn innovation into economic growth.
Did Schnabel say Europe should work as many hours as the United States?
No. She used a counterfactual to show how working hours affect GDP-per-capita comparisons, while describing shorter working weeks and more vacation as choices shaped by social and institutional preferences.
Has the 28th regime been approved?
The cited speech does not report approval or implementation. Its design, timetable and prospects remain unclear.
Source: ecb.europa.eu
