Seven world leaders urge Europe to take action against debt crisis

As ministers gathered in Washington for meetings of the Group of 20 and International Monetary Fund, an open letter to G20 president France from the leaders of Australia, Canada, Indonesia, Britain, Mexico, South Africa and South Korea stressed the threat of the euro zone crisis spreading worldwide.

"Euro zone governments and institutions must act swiftly to resolve the Euro crisis and all European economies must confront the debt overhang to prevent contagion to the wider global economy," the seven leaders wrote.

"The euro zone must look at all possible options to ensure long-term stability in the world's second largest international currency."

Also speaking on the eve of IMF and G20 meetings, Canadian Finance Minister Jim Flaherty joined a chorus of non-European officials warning that a new global credit crunch could bite unless Europe tackles Greece's debt problems, the most acute in the 17-nation currency area.

"The number one thing we'll talk about tomorrow night at dinner - as we did in Marseilles with the G7 - is that Europe has to pick a lane here, they've got to deal with that issue respecting Greece," he told the Canadian Broadcasting Corp.

"Otherwise the markets will get ahead, we will have some sort of a crisis, it will become a banking crisis, it will affect banks all around the world, we could be into another credit crisis which will cause contraction in the real economy. So we've got to deal with that," he said.

Flaherty said European nations could "get ahead of the game" if they were prepared to increase the euro zone's bailout funds to 1 trillion euros from 440 billion euros.