By David Barwick – FRANKFURT (Econostream) – European Central Bank Executive Board member Isabel Schnabel on Monday identified integration, innovation and sovereignty as key pillars for reviving growth and resilience in Europe, according to slides prepared for a speech in Münster.

The slides, prepared for the Jahreswirtschaftsempfang NRW 2026, said geopolitical shifts, demographic aging, climate change, fiscal pressures and Europe’s weakness in patents and venture capital investment were among the main challenges facing the region.

Geopolitical risk and trade policy uncertainty had risen sharply in recent years, while the Eurozone had lost export market share in non-energy goods volumes since 2010, the slides showed.

Potential GDP growth in the Eurozone was projected to decline in the coming years, reflecting weaker labor and capital contributions, according to the slides.

Schnabel’s slides said fiscal sustainability required higher potential growth, pointing to rising defense spending and projected increases in government interest expenditure under a no-policy-change scenario.

Europe was lagging the US and China in patent applications in biotechnology, information and communication technology, artificial intelligence and green technology, the slides showed.

Eurozone venture capital investment also remained well below that of the US as a share of GDP, according to the slides.

Reducing internal and external trade barriers carried “great potential”, the slides said, while AI adoption and research and development spending in defense could raise productivity growth.

Strengthening European sovereignty required reduced dependencies, including in critical raw materials, energy and payments, according to the slides.