European leaders at the World Economic Forum in Davos, Switzerland have urged Europe to press ahead with economic reforms. German Chancellor, Angela Merkel, says that in order to restore stability and achieve sustainable growth, Europe needs a long term reform programme.

Meanwhile British Prime Minister, David Cameron, has called for tougher measures to crack down on corporate tax avoidance.

German Chancellor Angela Merkel addresses delegates during the annual meeting of the World Economic Forum (WEF) in Davos January 24, 2013.

An end to short-term reforms. That was the call from many political and business leaders on the second day of the World Economic Forum in Davos.

German Chancellor Angela Merkel told the delegates that Europe is committed to a long-term reform programme to get back on track.

Angela Merkel said, "We are all agreed in the European Union that we want to continue to develop the economic and monetary union into a union of stability in Europe. This is the opposite of a short-term emergency operation, but rather it is a long-term path, with competitiveness on the one hand, and consolidation of state finances on the other."

Merkel spoke very much as a European leader, rather than a German one.

And her comments chimed in with those of Swedish Prime Minister Fredrik Reinfeldt, who’s concerned with tackling unemployment.

Fredrik Reinfeldt said, "A lot of the jobs we used to have are actually gone, and the ones that are coming are very often well-paid and you need a lot of skills to be able to be employed and the problem is that large parts of the population have a hard time to actually come in to the labour market."

The mood at Davos this year is described by many delegates as subdued optimism.

The euro zone survived intact in 2012 - and even though growth is proving elusive, new strong manufacturing numbers from Germany suggest the bloc is moving closer to recovery.

But challenges remain - and Europe’s cash-strapped governments hope to increase their tax take - by cracking down on avoidance.

It was mentioned by both Merkel and British Prime Minister David Cameron - who appeared to take a dig at Starbucks and other multinationals.