Worsening sovereign debt problems in euro zone countries pose the biggest single threat to the world economy at present.

However, European leaders have yet to summon the political will and employ the most powerful policies to tame the crisis as time and opportunities are being lost again and again.

Unemployment in the 17 countries that use the euro is already 11 percent, the highest rate since the single currency was introduced in 1999. Three nations -- Greece, Ireland and Portugal -- have asked for outside bailouts, crumbling under mountains of public debt. Meanwhile, Italy and Spain, the fourth and fifth largest economies in Europe respectively, look likely to become the next domino to fall.

Europe has been struggling with its debt problems for nearly three years. Prolonged uncertainties over whether the euro can hold together and for how long have spooked global investors and could trigger a devastating second meltdown of the world economy that is still recovering from the 2008 financial crisis.

Greece's upcoming parliamentary election on Sunday could mean a potentially catastrophic Greek exit from the currency union as the anti-bailout party is now running neck-and-neck with pro-euro coalition. If Greece drops the euro in the worst scenario, the knock-on dislocations to the real economy could lower euro area GDP by up to 2 percent, Goldman Sachs, an influential U.S. investment bank, predicted.

The ripple effect of the European woes will hit both its developed and emerging trade partners. East Asia and Pacific regional growth rate may slow down by 2 to 4 percent if Europe's situation deteriorates, due to reduced import demands, disruptions in cross-border capital flow and increased prudent savings, World Bank simulation test results showed.

Restoring market confidence and maintaining strong international coordination are key to resolve the crisis. The world, and Europe, in particular, must work together and stand together to cope with the challenge.

The upcoming Group of 20 summit in Mexico offers a fresh opportunity for world leaders to address the European debt crisis. As a forum to discuss and coordinate financial and economic policies, the summit is the place where leaders can work actively to find concrete measures to stem the debt crisis and boost economic growth.

With markets waiting, a strong response from policymakers is required to prevent contagion.

Global investors hope that the euro zone would take more decisive actions to safeguard long-term economic stability in the region and do everything they can to prevent the crisis from spreading to other parts of the world.