The World Economic Forum has released a report ranking the most competitive countries in the world. Although European countries are featured high on the list, the report also signals that it is a region with signific disparities.

Switzerland is ranked the most competitive economy and Finland is number three but several European countries are also low on the list. Spain is ranked 36th, Italy is 42nd, Portugal 49th and Greece 96th.

The report said: "Excessive public spending in the case of Greece, failing banks in Ireland and more recently Spain following the bursting of a decade-long real estate bubble, and Italy's and Portugal's general inability to grow and compete in a globalized environment have brought these economies to the very edge of sovereign bankruptcy for the first time since the end of World War II."

The World Economic Forum says that a holistic set of competitiveness-enhancing measures are required in order to escape the "downward spiral" and return Southern Europe to positive growth.

It lists three measures that include regaining financial stability by enhancing financial liquidity, reganing macroeconomic stability through fiscal discipline and structural reforms, and introducing labour market reforms to foster competition and investments.

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