French President Emmanuel Macron has set out his vision for reform of the French economy on day two of the World Economic Forum in Davos.

However, he warned that corporate tax avoidance had to be tackled and that Europe should move at different speeds.

Mr Macron called for a "global compact" to harness the negative effects of globalisation, warning against a race to the bottom on taxes and regulations.

Earlier, German Chancellor Angela Merkel praised the European recovery but admitted that Germany was falling behind in the digital ecomomy.

She said that isolationism and protectionism were not solutions to the economic challenges facing countries around the world.

Mrs Merkel also told the audience that she was open-minded about what kind of partnership the European Union would develop with the UK after Brexit, but noted that there could be no compromise on the EU's core principles in those talks.

US Commerce Secretary Wilbur Ross said the United States is not starting a trade war but trying to level the playing field of global commerce and fend off Chinese protectionism, including a "direct threat" in high-tech goods.

He was speaking in Davos, a day after Washington imposed steel import tariffs on washing machines and solar panels, billed as a way to protect American jobs by President Donald Trump, who is widely expected to take further action on steel, aluminium and intellectual property.

Meanwhile, the Chief Executive of IDA Ireland has said the recent corporate tax cut in the US will not have a bearing on the IDA's operations in securing US foreign investment.

Martin Shanahan was also speaking in Davos.