David Cameron has 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 such as 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."
Labour leader Ed Miliband said: "Yesterday we saw the British economy had gone into reverse, what David Cameron should be doing is taking action at home to get our economy moving and working with other world leaders to get the global economy going.
"But he is not doing that. He is standing by his policy of collective austerity all round the world. Rather than being so complacent about what is happening in Britain, he needs to wake up and realise that it's not working."