ECB President Mario Draghi told guests at the World Economic Forum in Davos, Switzerland on Friday that despite a renewed calm in the single currency bloc, much more needed to be done to get the "real" economy back on track.

Draghi said that markets for stocks, bonds and bank credit have "a new, restored sense of tranquillity," however he added that, "we haven't seen an equal momentum on the real side of the economy and that's where we will have to do much more."

The forum is a Swiss non-profit foundation that hosts an annual gathering of the global political, academic and business elite in Switzerland.

Debtor bonds 'helpful'

Draghi said the ECB program to buy the bonds of debt-wracked countries had proved "very helpful" in reducing the perception that the euro was on the point of collapse, however it was still too early to declare the crisis over.

Draghi outlined the "extraordinary" steps taken by European leaders and institutions to battle the three-year debt crisis and said these new structural reforms are "now bearing fruit."

He said moving forward, governments needed to make structural reforms to help their economies grow faster, which will in turn would reduce government debt.

He said that once that's achieved, the stimulus from the ECB's low interest rates and easy credit to banks "should find its way through to the economy and we will see a recovery in the second half of the year."

Merkel urges reform

Chancellor Angela Merkel, speaking at the forum on Thursday, acknowledged ongoing eurozone difficulties, though she also said she believed that "we have indeed made considerable progress in this area in the last few months."

Merkel also warned against impulses to reduce the pace of reform in the face of economic stagnation. The conservative chancellor pointed to Spanish record unemployment figures released on Thursday as an example of the difficult balancing act, and said she understood the urge to balance the books during periods of growth.

"But on the political side, experience tells us that often pressure is required to enable structural reform," Merkel said, advocating a tough course now to reach "a better tomorrow."

British Prime Minister David Cameron also spoke on Thursday and addressed his plan for an in/out referendum on EU membership in Britain, insisting that it was not about "turning our backs on Europe."

"The club we belong to is changing, we can't ignore this, change is under way," Cameron said. "And the debate about what this means, it is live, it is happening right now." The prime minister referred in particular to changes tied to the banking sector and the single currency, the euro, a currency Cameron said Britain was "frankly never likely to join."

hc/ipj (AFP, AP)