We welcome the important steps taken by European leaders to put in place the key elements of a plan to resolve their sovereign debt and banking crisis, however more needs to be done to quickly finalise and implement this plan in full.
At recent meetings of G20 Finance Ministers, the Australian Government made it very clear that our European colleagues needed to take swift, decisive and credible action to prevent the crisis spreading further in their region and throughout the global economy.
We called for a comprehensive plan to deliver a durable solution to address Greece's excessive levels of sovereign debt, recapitalise European banks and build a war chest large enough to end fears of the sovereign debt contagion spreading to other European countries.
Today we have seen the broad framework of such a plan, and a strong political consensus among European policymakers to finalise a definitive strategy over the coming period.
Of course, while today marks an important step forward, there is still much work to be done.
We call on European leaders to finalise their plan and take swift action to implement it, so as to restore confidence in global markets and build growth in Europe.
Global markets will swiftly demand the full detail and a clear plan for implementation.
Europe is building its war chest, but the war has not yet been won.
It still faces a difficult period ahead, which means global volatility is likely to continue for some time.
The situation in Europe will continue to have an impact on our region, our economy and our budget bottom line.
However, Australians should remain confident about our prospects, based on our rock solid fundamentals, our very low debt, low unemployment and our massive investment pipeline.
Our situation could not be more different than that facing Europe. Australia's public net debt is less than a tenth of that facing major advanced economies, our unemployment rate is around half that of Europe and our banks are well regulated and well capitalised.
The global community must support Europe as it moves forward from here.
That's why we have been advocating through the G20 a plan to ensure the adequacy of IMF resources to support adjustment in Europe and stability in the global economy.
This is the message we will again take to the G20 Leaders' Summit in Cannes next week.
27 October 2011