Top policymakers warned on Thursday the world economy is not out of the woods and a global recovery is still far from secure, urging caution as central banks work on withdrawing critical support.

China's Vice Premier Li Keqiang, the man tipped to become the country's next premier, said there were still twists and turns ahead as the world pulls out of recession, echoing calls to caution from bankers and other leaders at the annual World Economic Forum in the Swiss ski resort of Davos.

There still remain many uncertainties in (the) domestic and external economic environment, Li said.

The international community should increase coordination and cooperation in macroeconomic policies... and withdraw stimulus policies at the right time and the right pace in order to bring about a full recovery of the world economy at an early date, he told a packed auditorium.

His comments were echoed by South Korean President Lee Myung-bak, who heads the G20 this year, and urged member countries to tread gently as they begin to unwind extraordinary monetary stimulus measures.

John Lipsky, First Deputy Managing Director of the International Monetary Fund, told Reuters even signs of a recovery and a move to raise growth forecasts showed differences in the speed of recovery: Don't exit too early, think about the long term, he said.

Bankers, however, warned also of the risk of pulling out too late, potentially leading to distortions in competition.

It's a narrow path, the head of the Bank for International Settlements, Jaime Caruana, told Reuters, arguing for a move neither too early nor too late.


Economic worries were in focus on Thursday as markets continued to fret over Greece's future and its ability to repay debt, putting pressure on the euro and even raising speculation as to whether Greece could be forced out of the currency bloc.

Both Greek Prime Minister George Papandreou and Spain's Jose Luis Zapatero, whose country holds the European Union presidency, sought to dampen these concerns.

No one is going to be leaving the euro, more countries are going to be joining, Zapatero told the forum, adding that was the best proof of the project's success.

The euro club is a strong club with strong ties and reciprocal support -- let no one be mistaken.

Papandreou said his country was being targeted as a weak link but would be responsible for putting its house in order, with euro zone restraints helping to create discipline.

Business leaders joined the call for fiscal discipline as an important element in restoring sustainable growth.

We have shamelessly borrowed from our children. And we used it, we didn't invest it. That's the picture we're in, said Ben Verwaayen, Chief Executive of Alcatel-Lucent.

We cannot be complacent, said Sergio Ermotti, Deputy Chief Executive of Italian bank Unicredit.

Pressure was also growing on government commitments to conclude trade liberalization talks this year, though trade negotiators remained skeptical of political will to overcome hurdles including U.S. elections later this year.

Korea's Lee Myung-bak said concluding the Doha round before the end of 2010 should be given the highest priority.

However Pascal Lamy, director-general of the WTO, told reporters it was too early to tell whether leaders of the main economies would make good on their commitment.


Earlier, Wall Street executives attending the forum welcomed U.S. President Barack Obama's plan to create jobs and a softening of his attack on banks in his State of the Union address, but questioned whether the proposals would become law.

Obama pushed job creation to the top of his agenda in his annual speech to Congress and vowed not to abandon his struggling healthcare overhaul after the loss of a key Senate seat in Massachusetts raised doubts about his leadership.

The market is probably relieved that he didn't come out with some other nuclear attack on Wall Street, John Studzinski, global head of the advisory group at Blackstone said.

Tom Donahue, President of the U.S. Chamber of Commerce, said he welcomed the job moves and the fact Obama had adopted some of the initiatives promoted by his organization, including doubling exports in five years with the help of a push for improved trade agreements and changes in export control rules.

I think it is a recognition that everybody is getting down to the reality (that) what keeps people happy or not happy, what is going to get us out of the recession or not, what is going to address the deficit or not is jobs, jobs and jobs, he said.

(Additional reporting by Paul Taylor, Natsuko Waki and Ben Hirschler; Writing by Clara Ferreira Marques and Paul Taylor, editing by Mike Peacock and Hans Peters)