The annual World Economic Forum (WEF) is continuing for a second day in the Swiss mountain resort of Davos, with the eurozone debt crisis and its global impact dominating the talks.
In her opening speech to the meeting on January 25, Germany's Chancellor Angela Merkel said a "big rethink" is needed to help the eurozone and global economy deal with the challenges of structural reform and job creation.
There have been calls, including from the International Monetary Fund (IMF), for Germany and other nations to boost the size of the European Union's rescue fund for economically distressed nations.
But Merkel, in her address, suggested caution, calling for “a moment to reflect on what lessons we have learned from the global financial and economic crisis.”
"What we do not want is a situation where we promise something that in the end we can't back up," Merkel said, "because if Germany, representing all European countries, promises something that can't be kept if markets attack it hard, then Europe is really vulnerable."
Merkel said the austerity reforms being enacted in European countries must be balanced with reforms of how Europe is governed.
Prominent philanthropist and financier George Soros, also speaking at Davos the same day, launched an attack on Germany, calling Europe's biggest economy a “taskmaster” that is seeking to impose a strict anti-inflationary viewpoint on the rest of the continent.
"Instead of the [IMF], Germany is acting as the taskmaster, imposing tough fiscal discipline," Soros said. "And this will generate both economic and political tensions that could destroy the European Union."
Soros told journalists that “the austerity that Germany wants will push Europe into a deflationary death spiral” which will affect the economy and tax revenues, leading in turn to a rising debt burden requiring further budget cuts.
Soros also said weaker eurozone countries have been "relegated to the status of Third World countries" by having to pay back debts in a foreign currency.
The five-day Davos event, involving some 2,600 top business leaders and politicians, got under way following warnings from the IMF that the global economy was “deeply into the danger zone," with the eurozone crisis requiring urgent action.
Reports said British Prime Minister David Cameron was expected to accuse Europe of failing to act decisively on the crisis in his address to the Davos forum on January 26.
compiled from agency reports