Isabel Schnabel Member of the Executive Board of the ECB

Jahreswirtschaftsempfang NRW 2026 Münster, 13 July 2026

Challenge 1: Geopolitical shifts threaten competitiveness Rubric

Notes: Yellow line denotes the 30-day moving average of the trade policy uncertainty index, whereas the blue line represents the 30-day moving average of the global geopolitical risk index.

Global export market shares (non-energy goods volumes,

percentage point change since 2010) (indices)

(non-energy goods volumes, percentage point change since 2010)

Sources: CPB, TDM and ECB staff calculations. Notes: Long-run trends in export market shares in volume terms should be interpreted with caution. Euro area export volumes and world import volumes are not fully consistent, as each statistical office employs specific methodologies for deflating and outlier cleaning. Methodologies may differ in terms of outlier detection, replacement and quality adjustment. Based on this, volumes (excluding energy) series used to compute export market shares shown are calculated by taking CPB (Netherlands Bureau for Economic Policy Analysis) volumes (in 2005 chain linked billion euros) and subtracting the share of energy exports. This share of energy exports is based on TDM (Trade Data Monitor) values and includes HS2 sectors 25, 26, 27, 97, 98, 99. 2Latest observation: 2025. www.ecb.europa.eu©

Challenge 2: Demographic ageing and climate change dampen growth Rubric

Potential GDP growth in the euro area (annual change in % and percentage point contributions)

(annual change in % and percentage point contributions)

Global GDP losses due to climate change (% of global GDP)

Source: European Commission Spring 2026 Forecast. Notes: The projections start in 2026, with a cut-off date of April 2026.

Sources: IIASA NGFS Climate Scenarios Database, NiGEM model with REMIND inputs (Phase V publication). Notes: The chart shows NGFS long-term scenarios. The euro area is most likely to be hit less severely

publication). Notes: The chart shows NGFS long-term scenarios. The euro area is most likely to be hit less severely than the global average, which is mainly since its national climate action plans are slightly more ambitious than most of the other countries, thus the additional transition risk weighs less strongly.

Challenge 3: Fiscal sustainability requires higher potential growth Rubric

Government interest expenditures (% of GDP)

Sources: COFOG, European Commission Spring 2026 Forecast and ECB staff calculations. Notes: The dashed line represents the flexibility allowed under an activated national escape clause (NEC), equivalent to 1.5% of GDP. This flexibility can be applied if a Member State requests activation, based on their selected base year, and is added to the 2027 spending path for 2028. For most of the 14 countries using the NEC, 2021 serves as the base year, while ES, BG and GR use 2024\. The dotted line assumes that all EA countries activate their NEC in 2026 and increase spending linearly until 2028. The shaded blue area marks the projection period. Latest observation: Preliminary 2027 data is available for all countries except IE, IT, CY, LV, LT and MT. Data through 2025 is available for all euro area countries.

Source: ESCB DSA based on European Commission Spring 2026 Forecast. Notes: The figures refer to a hypothetical no fiscal policy change scenario, where the structural primary fiscal balance (i.e. excluding the cyclical impact of macroeconomic developments) remains constant at 2025 level except for the expected change in ageing cost.

Challenge 4: Europe is falling behind on patents and venture capital investment Rubric