G20 leaders have made "very important advances" in dealing with the spiralling European debt crisis and have agreed to new measures to pursue economic growth, according to Prime Minister Julia Gillard.
The concluding statement from leaders at the Mexican beach resort of Los Cabos points to greater financial integration within Europe amid growing international pressure for strong action.
"We support the intention to consider concrete steps towards a more integrated financial architecture, encompassing banking supervision, resolution and recapitalisation, and deposit insurance," the joint G20 statement said.
It added that eurozone members would "take all necessary measures" to stabilise the single currency bloc, including moves to "break the feedback loop" that has weak governments piling on more and more debt to bail out their banks.
Ms Gillard says the decision to pursue "irrevocable economic ties" within Europe will form part of a long-term solution.
"They acknowledge that this requires addressing the competitive imbalances within the euro area, including by continuing to undertake structural reforms at the national level," Ms Gillard told reporters in Mexico.
She says leaders have also signed up to a new "growth and jobs action plan" that commits all G20 countries to implement specific policies aimed at promoting domestic economic growth, with a strong focus on external review.
[AS KRUGMAN HAS ALWAYS CORRECTLY RECOMMENDED .. why? .. because it WORKS in depression .. history says so]
"This compact, for the first time, introduces a level of mutual accountability," Ms Gillard said.
"Countries' performances will be subject to peer review - if you like, we will be holding each other's feet to the fire."
Australia has committed to pursue reforms to skills training and further investment in infrastructure, while China has committed to continue working towards "exchange rate flexibility" and "reducing its current account surplus", according to Ms Gillard.
Progress was also made in boosting the resources available to the IMF to help protect vulnerable countries from the backwash of the eurozone crisis.
China led emerging powers in topping up pledges to bring the new pool for emergency loans up to $US456 billion, though only in exchange for a greater say in fund affairs.
International Monetary Fund chief Christine Lagarde has applauded the additional pledges for the multi-billion dollar "global firewall".
"(This) puts the IMF in a much better position to help its 188 member countries restore sounder economic and financial conditions worldwide," Ms Lagarde said in a statement.
"We all are concerned about Europe, particularly the eurozone.
"Global economic conditions continue to face a range of uncertainties, and confidence must be restored," she said.
Ms Gillard says extra pledges to the IMF will provide "extra financial ballast to support the global economy in these times of ongoing uncertainty".
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