Europe still has tough road ahead: Swan

Treasurer Wayne Swan says events in Greece are a reminder that the road to sustainable finances can be a painful one.

Mr Swan has welcomed the Greek parliament's approval of a new round of austerity measures as a further step in tackling Europe's sovereign debt crisis, but says it still has a tough road ahead.

The approval of austerity measures in return for a multi-billion euro rescue package came against the backdrop of a long day of street battles between police and protesters that left buildings ablaze in Athens and streets in chaos.

"Scenes from the streets of Athens are very disturbing and while these measures are not popular, they are crucial if Greece is to get its budget back onto a sustainable footing," Mr Swan said in a briefing note on Monday.

"The situation in Greece is a confronting reminder that the road to sustainable finances can be a painful one, and that European nations should waste no time in getting their fiscal houses in order."

He said economic growth in Europe was crucial to achieving debt sustainability, but to achieve stronger growth, Europe must also embark on a wide ranging package of structural reforms to boost competitiveness.

"The reforms that successive Australian governments have implemented have served us well in weathering current global instability and building one of the strongest economies in the developed world."