Other world economies also at risk from fallout
AUSTRALIA'S leaders have warned that their economy risks being damaged by the European debt crisis, which is bad news for thousands of Irish people heading south to escape the economic slowdown.
The warning came as heads of the 21 nations that make up the Asia-Pacific Economic Cooperation (APEC) group held talks yesterday in Honolulu.
The APEC leaders' talks focused on preventing contagion from Europe damaging their economies.
US President Barack Obama, China's President Hu Jintao and Australian Prime Minister Julia Gillard were among the leaders attending the summit.
The leaders secured agreement on the outlines of a regional trade deal, though co-operation in the region is marred by tension between the US and China because US officials believe China's currency is kept deliberately weak to boost competitiveness.
The APEC leaders were expected to release a statement late last night, setting out their concern that Europe's unresolved debt troubles will spill over into the Asia-Pacific region.
The European crisis was behind worrying economic news from Australia which has hurt Ms Gillard's pledge to return to a budget surplus in 2013. Last night, her government warned the budget plan was being made "a lot tougher" by Europe's debt crisis.
"Every economy in our region is feeling the impact of events in Europe," according to Australian finance minister Wayne Swan. "Many European nations have been slow to face up to the tough decisions not just for the past 18 months, but for the past few decades. There's been a failure to undertake the structural adjustments necessary to drive growth and increase competitiveness. Instead, budgets in many countries have been allowed to blow out and become unsustainable."
More than 20,000 Irish people received working holiday visas, allowing them to work in Australia, in the year to the end of June; this is up 50pc over the previous 12 months. Most have been able to rely on the buoyant Australian economy to provide jobs, but that economy is already slowing down.
Earlier this month the Reserve Bank of Australia cut its forecasts for economic growth and inflation for the next two years, as financial turmoil in Europe makes businesses there more reluctant to hire and consumers wary about spending.
Short of buying European government debt, Asian leaders can do little to halt the crisis; but the latest trade deal is a boost to Mr Obama.
He said the commitment by nine countries, including the US and Australia, to forge an Asia-Pacific trade accord within the next year was evidence that "American leadership is still welcome".
Mr Obama announced that the officials agreed on a blueprint that will lead to drawing up a formal Trans-Pacific Partnership in the next 12 months, a deal that could create a model for expanded trade with more Asian countries.