Australian Treasurer Wayne Swan sounded caution over Canberra's plans to return to surplus next year, warning that Europe's debt fears had delivered a "huge hit" to global confidence.
Swan on Sunday said there was a mood of "sober realism" among finance ministers at this weekend's meetings of the G20 and International Monetary Fund, with a "fair degree of concern" about the state of the global economy.
He said "political gridlock" had made it difficult for European nations to come together quickly to agree on a response, adding that global bodies must stand ready to support the region "if and when that is required".
"The events in Europe can impact globally and therefore we do need not just a European response in the first instance, but what we also need is bodies like the G20 and the IMF backing up the Europeans," Swan told ABC television from Washington.
The IMF repeated pledges of collective action this weekend as warnings intensified of a possible European meltdown, and Swan said the region's leaders had to meet their bailout promises to restore global confidence.
"They are determined to implement those commitments, but of course they must pass through member parliaments in Europe," he said.
"That's why the Europeans really need to get cracking and get those passed through all of their procedures and operating in full."
Australia's links to fast-growing Asian economies helped it weather the global financial crisis as the only advanced economy to dodge recession, and booming mining exports have shielded it from the worst of the recent turmoil.
But Swan said the country was not immune from Europe's problems, tempering his previously strident promises of returning the budget to surplus by 2012-13.
"We're determined to come back to surplus, but I just make the observation that these events globally have an impact upon global growth," he said.
"That has an impact upon domestic growth. That has an impact on revenue collections. And of course it makes it tougher to come back to surplus."