The Greek sovereign debt crisis has apparently set the tone at the G20 meeting in Toronto, Canada.
Britain's newly elected conservative government talks seriously about pursuing an austere economic program. The governments of Spain, and to some extent, Italy, are going into a belt-tightening mode. The German government has remained as tight-fisted as ever, and French workers took to the streets to protest the extension of the retirement age by two years to 62 as part of government efforts to control welfare spending.
Despite worries about a relapse into recession, the United States government is unlikely to pump additional money or take further measures to stimulate economic growth.
Most European economic powers have embraced the proposal by Canada, which hosted the conference, to set the goal of cutting budget deficits by half in 2013.
It is too early to question the wisdom of the proposal. But leaders of the world's developed nations seem committed to the act of budget balancing in the coming years.
The impact this will have on the developed countries needs to be carefully monitored by Asian economies - particularly China - that depend heavily on exports to the United States and major European economies to fuel growth.
Spirited government spending by developed nations in the past few decades had helped boost total final demand, sucking in imports of both consumer and capital goods from low-cost manufacturing bases in Asia and Latin America.
Much of the current account surpluses accumulated by the exporting countries were re-invested in government bonds and other securities issued by the developed countries, especially the United States. The large inflow of these relatively cheap funds further encouraged greater government spending in the developed economies.
The cycle hit a snag earlier this year when Greece was on the brink of defaulting on its sovereign debt, requiring a massive rescue operation by other members of the euro zone. The Greek debacle has revealed potential problems related to debt servicing by some other euro zone countries, particularly Spain and Italy.
This is not the time for Asian economies to feel smug although they, so far, have largely remained intact despite the global economic slowdown in the past couple of years.
China's robust economic growth, thanks to the government stimulus program, has helped keep intra-regional trade and investment humming.
Hong Kong's service-oriented economy, for instance, was able to recover from the blow of the credit crunch because of increased demand from the mainland.
But the future of Hong Kong and other Asian economies will still hinge on global demand for their goods and services. It seems unlikely that China's domestic demand can increase in the next few years to levels that can sustain the nation's economic growth in a prolonged global recession.
Economic recovery from the credit crisis, which erupted in the United States in 2008, has remained fragile. Unemployment in the developed countries is still too high to be socially and politically acceptable.
But the new threats arising from ballooning sovereign debt crises, of course, is seen by many national leaders to be serious enough for them to abandon any expansionary economic policy.
To be sure, budget cuts don't necessarily lead to economic slumps. But tightening fiscal policy, accompanied by higher taxes, will almost invariably trigger a downturn in aggregate demand, resulting in declining imports from developing economies.
What's more, rock-bottom interest rates and banks' wariness to lend have left little room for the use of monetary policy to stimulate economic growth.
To maintain economic growth, developing economies may need to adopt a more expansionary fiscal policy to boost domestic demand.
Deficit budgeting is not something Asian governments would consider lightly. But many have accumulated large enough reserves to cover reasonable shortfalls for at least a few years.
Perhaps, a better-coordinated effort by the major developing economies is needed at this time to minimize the risk of having global economic recovery choked by the budgetary straitjackets of the developed countries.