Treasurer Wayne Swan has supported calls for Europe to take more action to solve its debt crisis, saying no country is immune from the fallout.
Mr Swan welcomed comments by International Monetary Fund managing director Christine Lagarde that Europe must develop measures to insulate nations such as Italy and Spain from a severe financial crisis.
"The European crisis is clearly having a substantial impact on the global economy, and no country - including Australia - can expect to be immune," he said in a statement.
Mr Swan said $140 billion had been "ripped" from federal government revenue due to global instability, including an extra $20 billion in the six months since the 2011 budget due to the European crisis.
But Mr Swan also said Ms Lagarde's comments were a reminder that growth in the Asia-Pacific region was healthier than Europe's and that Australia's growth prospects were solid.
"Just as the government got the big calls right when the global recession hit, we have been ahead of the curve as global conditions have taken another turn for the worse in recent months," he said.
"In particular, the government's forecasts in the mid-year budget update already incorporate a substantial slowdown in the global economy - caused largely by the European crisis - and already assume a recession in Europe."
Ms Lagarde said Europe's stronger economies should do more to boost growth and beef up defences against the continent's debt crisis, which is threatening another recession in the Eurozone.
"There are three imperatives - one is stronger growth; two is larger firewalls; three, deeper integration," she said in a speech in Berlin on Monday.
