By David Barwick – FRANKFURT (Econostream) – European Central Bank President Christine Lagarde on Wednesday said that the countries of Europe needed to join forces financially to meet the costly challenges it faces.

During a panel discussion at the London School of Economics, Lagarde, observing that she was merely stating “a common position that has been adopted by the Governing Council of the European Central Bank,” called for a “common endeavor” at the level of Europe to shoulder “the significant challenges and massive investment needs that we have in Europe, meaning defense, the green transition and now artificial intelligence … which are north of €1 trillion.”

“And whether it takes the form of a fiscal common situation—which is currently under debate, but I don’t think it’s going in that direction well enough—or whether we go towards the creation of European safe assets which would be considered on a par with the Treasury bonds of the United States is the direction that will be necessary in order to finance this,” she said.

Also necessary in Europe was “the creation of a capital market that is one single market with one single supervision institution that provides a completely coordinated and unified system throughout Europe,” she said.

This would mean that “instead of exporting annually €300 billion to the rest of the world from the massive savings that we have, we actually invest the savings at home and we encourage innovation, venture capital and we keep the ideas at home in order to produce the invention of the future,” she said.

In other comments, Lagarde said that “the world order is disorderly at the moment,” called Europe “an amazing catalyst for peace,” and highlighted the importance of central bank independence.