Economic reform alone will not enable Europe to catch up with US growth rates without massive immigration into the EU, according to the chairman of Goldman Sachs, Mr Peter Sutherland.

Speaking in Davos, where he is attending the annual meeting of the World Economic Forum, Mr Sutherland said that Goldman Sachs expected a trend rate of economic growth in Europe over the next 10 years of 2.2 per cent, compared with 3.3 per cent in the US.

"The real problem for Europe is demographic, and higher immigration would boost growth. To go from 2.2 per cent to 3 per cent growth would require three million immigrants per annum. That's not politically feasible," he said.

Mr Sutherland cited the Republic's experience in recent years as an example of how opening up to immigration could help to generate more employment.

"On an economic basis, immigration has been positive," he said.

Despite relatively low growth, Europe has not been performing as badly as many suggest, Mr Sutherland said. He pointed out that GDP per capita growth is, at 1.8 per cent, similar to that in the US, and that productivity growth has also kept pace with the US.

"European growth has been held back by a political choice to work less and to have fewer people working, with earlier retirement... Our export performance, particularly in Germany, has been very good," he said.

Mr Sutherland suggested that better implementation of the EU's single market in sectors such as energy, transport and financial services could boost growth in Europe.

He said that the dollar would not recover unless the US signalled its clear intention to address its twin deficits, but remarked that there was little sign of such a move. "There is a real potential, unless something is done, for the strength of the euro to increase dramatically. It's potentially painful but it doesn't appear to be adversely affecting exports," he said.

Germany's Chancellor, Mr Gerhard Schröder, told the forum yesterday that his government had embarked on an ambitious reform programme to adjust to new economic realities. The biggest changes are to pensions, healthcare and the labour market with the creation of a large low-wage sector.

"We needed to respond to these challenges while ensuring that our social security and welfare systems are safe and protected. They must be readjusted so that in ever-changing surroundings they become valuable tools for the future."

The actress Sharon Stone raised $1 million (€0.77 million) in five minutes at Davos yesterday when she called on participants at a session with Tanzania's President, Mr Benjamin Mkapa, to help fund bed nets to protect children from mosquitoes that carry malaria.

"I was particularly moved by President Mkapa and by his urgent need of today, so if you don't mind I'd like to offer my help and support to you, and I'd like to offer you $10,000 to help you buy some bed nets today. Would any one else like to be on a team with me and stand up and offer some money and help him as well?" she said.

A man next to her immediately pledged $50,000, starting a stampede of donors until, five minutes later, the pledges reached $1 million.

Meanwhile, trade ministers meet in Davos today in an attempt to kick life into the Doha round of trade liberalisation talks, which is back on track but frustrating many governments with the slow speed of progress.