European Central Bank (ECB) President Christine Lagarde said on Monday that without bold economic policies to "make up the ground we have lost in terms of productivity and technology," the bloc will struggle to sustain its welfare benefits and boost spending on defense and climate change initiatives.

"Otherwise, we will not be able to generate the wealth we will need to meet our rising spending needs to ensure our security, combat climate change and protect the environment," she pointed out during a speech in Paris.

She also called on member nations to "adapt quickly to a changing geopolitical environment and regain lost ground in competitiveness and innovation."