Australian federal Treasurer Wayne Swan on Thursday called on Asia-Pacific region leaders to form a united voice to urge Europe address its financial crisis quickly.
Australia's sharemarket fell around three percent on Thursday morning, as fresh fears about the stability of Italy and Greece deepened the eurozone debt crisis overnight.
Swan, who will attend the Asia-Pacific Economic Cooperation (APEC) finance ministers meeting, said the APEC meeting came at a very difficult time for the international economy with two of the world's biggest growth engines misfiring.
While Asia is outperforming other regions, it had not escaped the impact of slower growth on both sides of the Atlantic.
"Every single economy represented at APEC has been impacted by 18 months of failure by European leaders to deal with their sovereign debt crisis," he told Australia Associated Press. "This is a challenge for Europe, but we've all got a stake in the outcome."
The treasurer also said it was vital APEC, like the G20, continue to pursue key structural reforms to underpin strong, balanced and sustainable global growth.
APEC can also play a key role in meeting regional challenges, such as infrastructure financing, financial regulation and financial empowerment, Swan said.
As a result of the fresh fear, there were heavy selling on Wall Street and European markets overnight and the local market has followed suit, with Australia's benchmark ASX 200 down 126 points to 4,220 and the All Ordinaries Index was off 122 points to 4,285 at 10:45am (AEDT) on Thursday morning.
The Australian dollar has been sold off in line with equities, down against all major currencies except the euro. It was buying 101.3 U.S. cents, 78.8 Japanese yen, 74.9 euro cents, and 63.7 British pence.