David Cameron has told EU leaders they must be "bolder" if they want to shake off their economic troubles.
The UK prime minister told the World Economic Forum in Davos it was a "perilous time" for Europe's economies and "tinkering won't cut it anymore".
He defended his government's deficit reduction plan, saying it helped the UK "get ahead of the markets".
But UK opposition leader Ed Miliband, said the policy of "collective austerity" was not working.
A host of world leaders and business chiefs are addressing the annual conference in the Swiss ski resort.
On Wednesday, German Chancellor Angela Merkel said a "big rethink" was needed in the eurozone about how to create jobs and raise living standards.
Mr Cameron's speech came the day after official figures showed the UK economy shrank by 0.2% in the final quarter of 2011, with worries about the prospect of a return to recession.
The International Monetary Fund also downgraded its forecasts for global growth earlier this week.
In a message to his European counterparts, Mr Cameron argued his government's efforts to tackle its deficit had "earned credibility and got (the UK) ahead of the markets", and eurozone leaders should now take similarly decisive action.
The eurozone crisis was "weighing down business confidence and investment" across Europe, he said, and EU leaders had to "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," he said. "This is time for boldness not caution."
Europe's problems - notably the debt crisis in Greece and the question marks over European banks - were clear, he said, and "with bold action and real political will we can fix them".
He warned that competitiveness remained Europe's "Achilles heel", with the single market incomplete and "unnecessary" measures from Brussels burdening businesses and destroying jobs.
"Here's the checklist - all proposed EU measures tested for their impact on growth; a target to reduce the overall burden of EU regulation; a new proportionality test to prevent needless barriers to trade in services and slash the number of regulated professions in Europe.
"The truth is, we can't afford to wait any longer."
In the absence of a conclusion to the Doha free trade talks, Mr Cameron also proposed that a "coalition of the willing" could "forge ahead with more ambitious deals of their own" such as agreements with India, Canada and Singapore.
He also called for the EU to "look at options for agreement" with the US in a deal that "could have a bigger impact than all of the other agreements put together".----
More on the BBC's website: http://www.bbc.co.uk/news/uk-16736260
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