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CEOs: Europe Recovery on Track

The Reichstag, German Parliament Building
Hiroshi Higuchi | Photolibrary | Getty Images
The Reichstag, German Parliament Building

The European economy will continue to stabilize albeit slowly this year as the euro zone crisis looks to be contained, a number of CEOs told CNBC at the World Economic Forum in Davos, Switzerland.

Nils Smedegaard Andersen, Group CEO at shipping company A.P.Moller -Maersk Group said he believed the euro zone was heading in the right direction.

"We see a gradual stabilization in Europe and the political tendencies are going in the right direction," Smedegaard Andersen said.

Tidjane Thiam CEO at insurer Prudential struck a similarly optimistic,but cautious note, warning that Europe was not "out of the woods."

"I'm more positive than I was a year ago and Europe feels much better than it was," Thiam said.

Since last year's announcement by the European Central Bank (ECB) President Mario Draghi of a bond-buying program, the euro zone crisis bond yields have fallen and stock markets have rallied.

The program known as Outright Monetary Transactions – would see the ECB buy up unlimited amounts of bonds of a struggling country.

But while confidence has returned, Barry Eichengreen,professor of economics and political science at the University of California,Berkeley said the long-term debt issues remain.

"The euro crisis is in remission but the underlying condition has not been cured. None of the underlying problems have been solved and there has been backtracking on banking union and a number of other issues,"he said.

He added the crisis would be back "sooner rather than later." "Where will the growth come from? Those problems remain."

The mixed views come on the back of Draghi's comments on Tuesday that the currency bloc can start 2013 with more confidence. The ECB chief said the "darkest clouds over the euro zone had subsided."

(Read more: ECB's Draghi: Darkest Clods Over Euro Have Passed)

Martin Sorrell, CEO at WPP said the euro zone was in muchbetter shape under the leadership of Draghi but confirmed it would be a slowprocess, suggesting Western Europe would"really start to recover" only in 2017.

By CNBC's Shai Ahmed; Follow her on Twitter @shaicnbc

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