Australian Treasurer Wayne Swan acknowledged that the debt contagion problem in Europe and the budget deficit problem in the U.S. will affect Australia and Asia, which would make it harder to achieve a budget surplus by 2012-13.

"There's no doubt that recent events... impact on global growth, that flows through to domestic growth, that flows through to budget revenues, and that does have an impact," Mr Swan told Sky News.

However, he was positive that the country would weather the looming new international economic crisis because of Australia's position of strength. In particular, Mr Swan cited the country's relatively low unemployment rate, strong banking system and large investment pipeline.

"Major economies need to deal with the current challenges with the same determination that saw us stare down the global financial crisis.... While the Australian economy has grown over 5 per cent since the crisis struck, many of our peers still haven't make up the ground they lost," Bloomberg quoted Mr Swan's economic note from Washington.

According to the International Monetary Fund forecast, the U.S. economy will expand 1.5 per cent this year, Europe by 1.6 per cent and Australia by 1.8 per cent.

"The crisis has now entered a new 'political phase' with markets calling for swift action by policy makers.... Even though we are likely to see bouts of instability continue for some time to come, we need to remember that our situation couldn't be more different to many of our peers," wrote Mr Swan, who was recognized by Euromoney magazine as Finance Minister of the Year.

He is in Washington to receive the award and attend meetings of the World Bank and the IMF with other G20 finance ministers.

Mr Swan said because of the interconnection of economies, it is very important that there should be a global response to the Eurozone debt problem. The threat of another round of global financial crisis over the European situation wiped off last week $71 billion from the Australian equity market and plunged the Australian currency to a 10-month low.

In response to the looming crisis, the IMF policy board agreed over the weekend to act decisively and collectively to bring back investor confidence and financial stability, and rekindle global growth.

David Murray, chairman of Australia's Future Fund, blamed Europe's sovereign debt crisis to lack of understanding and discipline by national leaders. In the case of Australia, he warned that the risks of a crisis would be worsened by the country's two-speed economy. He recommended a reduction of Australia's debts.

"This is not a time when states and federal governments should be becoming more highly indebted.... And they are. So that is a weakness of fiscal policy in Australia and that's holding back development and making to so-called Dutch Disease risk higher than it need be," Bloomberg quoted Mr Murray.