The continuing financial distress in Europe has prompted Australian business leaders to call on the federal government to introduce more supportive measures that would safeguard the health of the economy.

The Australian Chamber of Commerce and Industry has acknowledged that 2011 was marked by unsettling worries that were largely spawned by the Euro debt crisis, which inevitably disturbed sectors on the domestic front.

And all indications suggested that the situation will only worsen in 2012, prompting fears among the Australian business community that challenging problems lie ahead, ACCI chief executive Peter Anderson said Thursday.

In such an environment, the coming year "needs to be a year when making profits is greeted with a sigh of relief," he told the Herald Sun.

"Unfortunately, 2012 carries the risk of rising business failures and higher unemployment due to lower global growth forecasts and increased business costs pencilled in from mid-year," the ACCI chief said.

Australian business leaders and economists remains pessimistic on the financial struggles being faced by European economies, which experts said should spill over to the rest of the world, Australia included.

On Thursday, the Italian government auctioned off long-term bonds, worth some 8.5 billion euros, that the international community closely monitored to check if the general sentiment about the collective European economy has gained traction.

The reaction back home, the Herald Sun said, was hardly encouraging as the ASX200 shed some 0.4 percent of its value on the same day, which analysts said, was indicative of its overall projected decline for 2011.

Market analysts have predicted for the bourse to retreat by at least 15 percent for the year.

Despite the considerable success that marked the Italian bond auction, CommSec chief economist Craig James said that what happened only highlighted the underlying worries espoused by many European economies.

As of the last check, overnight deposit levels in European Central Bank reached 425 billion euros, which James noted is a record high.

"Latest figures show that European banks prefer to deposit funds at the European Central Bank rather than lend to each other," he stressed.

And back home, many businesses are set to encounter higher operational expenses with gloomy outlook for reasonable returns for the most pat of 2012, James said.

It's only logical that many of these businesses will go under by the following year, the CommSec economist warned.