FRANKFURT, May 6 (Reuters) - Europe needs to develop a “green” capital market union to generate cash for sustainable investment and remain the location of choice for investors issuing green debt, European Central Bank President Christine Lagarde said on Thursday. Europe is aiming for a leading role in the shift to sustainable growth and the European Union is planning to issue 225 billion euros of green bonds as part of a recovery project. However, the bloc’s capital markets remain relatively underdeveloped. “Green Capital Market Union not only gives us a tremendous opportunity to craft something genuinely European and with immediate impact, but it also has the potential to transform the EU as a whole,” Lagarde said. For such a union, earlier advocated by ECB board member Isabel Schnabel, the bloc needs to require firms to disclose sustainability data and requires proper European supervision of green financial products with official EU seals, Lagarde said. The EU would also need harmonised tax treatment of investments in sustainable finance and further harmonisation of national insolvency rules, Lagarde added. The ECB is one of the biggest buyers of green debt and due in part to its copious purchases, around 60% of all green senior unsecured bonds were issued in Europe last year. (Reporting by Balazs Koranyi; Editing by Steve Orlofsky) Our Standards: The Thomson Reuters Trust Principles.