David Cameron delivered a scathing assessment of Europe's failure to promote economic growth as he urged it to be "bold" to promote business.
The Prime Minister said it was no time for "tinkering" and described European Union plans for a financial transactions tax as "madness". In a speech to the World Economic Forum in Davos, he was strongly critical of what he said were anti-competitive Brussels regulations and the flawed framework for the euro.
"In Britain we are taking bold steps necessary to get our economy back on track, but my argument today is that the need for bold action at European level is equally great," he said. "Europe's lack of competitiveness remains its Achilles heel."
The annual gathering comes amid renewed gloom about the economy after the International Monetary Fund this week downgraded its forecasts for global growth. Britain is facing the prospect of a return to recession after the Office of National Statistics on Wednesday reported a 0.2% contraction in the UK economy in the final quarter of 2011.
Mr Cameron accused the EU, despite the economic challenge, of "doing things to make life even harder". He attacked the "unnecessary " regulations on business that "can destroy jobs" and said the proposed financial transactions tax could cost hundreds of thousands of jobs.
"Even to be considering this at a time when we are struggling to get our economies growing is quite simply madness," he said.
The Prime Minister suggested the eurozone had none of the features common to successful currency unions like the US dollar and British sterling.
In a message to his European counterparts, Mr Cameron went on: "This is a time to show the leadership our people are demanding. Tinkering here and there and hoping we'll drift to a solution simply won't cut it any more. This is a time for boldness, not caution. Boldness in what we do nationally - and together as a continent."
But he sought to reassure his European counterparts that, despite vetoing a new EU treaty to deal with the eurozone crisis in December, he wanted Britain to remain within the EU - contrary to the demands of some Tory backbenchers.
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He said: "To those who think that not signing the treaty means Britain is somehow walking away from Europe let me tell you, nothing could be further from the truth. Britain is part of the European Union. Not by default but by choice. It fundamentally reflects our national interest to be part of the single market on our doorstep and we have no intention of walking away."
