German Chancellor Angela Merkel on Wednesday urged change and innovation to address malaise in Europe, such as low growth and high unemployment.

"We have no choice but this urgency to change," she told the opening session of the World Economic Forum.

"Something has to be done. As the biggest economy in Europe, we must take up our responsibility."

She asked for more investment in research and development, the reduction of labor costs and sweeping changes in other national policies.

She also asked enterprises to be allowed more leeway. "We have to make sure the political world intervenes at the right points and withdraws when it's appropriate."

Merkel also advocated free trade and pledged that her country would do its best to push forward talks on trade liberalization.

"We saw what happened in Hong Kong. We must continue our efforts so that that does not happen again. We will do what we can so that the WTO becomes a major guarantor of international agreements."

Little progress was made at last month's World Trade Organization (WTO) talks in Hong Kong when developed countries refused to free up farm trade while developing countries were reluctant to open markets for services and manufactured goods.

Merkel said there is a need to find a social framework that would incorporate social and environmental concerns.

"We need to knit environmental protection and social measures together with the World Trade Organization, the International Monetary Fund, with the World Bank," she said.

"It will not be possible to reach agreement on common political and economic interests without sharing common ethical grounds," she said.

Source: Xinhua