(Bloomberg) -- The war in Ukraine has shown Europe doesn’t understand how powerful it could be on the world stage and the bloc should “flex its muscles” more than it does, European Central Bank President Christine Lagarde said. 

Speaking at the World Economic Forum in Davos, Lagarde said the EU’s “monumental market” means it can set the conditions of trade and its competition laws mean it can block mergers around the world. She also noted potential strength as a unified purchasing group and huge pension fund resources that could be better deployed.

“As often in Europe, united in diversity and rising in adversity,” Lagarde said on a panel about European unity. “We are in that situation of adversity and we need to flex our muscles -- we do have collective, incredible muscles.” 

Yet the ECB President said more needs to be done in some areas, such as boosting the services sector and overcoming the self interests of nations. She also said Europe can be a better “moral power” if it succeeds in putting values ahead of making cost savings, as it has done in the past. 

“Europe is an incredible force but we score against our own team occasionally by slowing down the process,” and by looking at national interests instead of common ones, Lagarde said.

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