Europe needs structural reforms as concrete approaches towards economic recovery and sustainability, German Chancellor Angela Merkel said on Wednesday.

Speaking to over 2600 participants from over 100 countries attending this year's World Economic Forum meeting in Davos, Merkel said that Europe has not learned enough lessons from the crisis.

Although some regulations have been put in place to prevent the systematically important big banks from further destabilizing the financial system, there are still many issues left to be tackled, she said.

The public debt problem facing many European countries can not be cured by waving of magic wand, Merkel said. Breakthrough over the debt issue relies on budget discipline and financial stability, she added.

The German Chancellor went on to say that Europe's economic future, in the long run, relies on job creation, in particular for the younger generation, and reforms and deregulation in labor market.

According to Merkel, the issue of job creation will be the focus at the EU Summit in Brussels on Jan. 30.

She also called for a restructuring of the EU political system.

The 2012 annual meeting of World Economic Forum is scheduled for Jan. 25 to 29, under the main theme of "The Great Transformation: Shaping New Models."

There are four sub-themes for discussion: Growth and Employment Models; Leadership and Innovation Models; Sustainability and Resource Models; and Social and Technological Models.

Participants of the five-day gathering include over 1,600 business leaders, close to 40 heads of state or government, as well as social entrepreneurs, young global leaders and representatives from civil society, media, academia and the arts.

German Chancellor Angela Merkel, British Prime Minister David Cameron, United Nations Secretary-General Ban Ki-moon, and Managing Director of the International Monetary Fund (IMF) Christine Largarde are among the participants of the forum.