Europe has endured the pain of layoffs, wage cuts and tax increases designed to bring government debt under control. So where's the gain?
Far from falling, debt burdens are rising fastest in European countries that have enacted the most draconian austerity programs, according to the Associated Press' Global Economy Tracker, which monitors the performance of 30 major economies.
The numbers back up what many analysts say: Austerity isn't just painful -- it can be counterproductive and even make a country's debt load grow.
Many observers fear that the cutbacks will cause Europe to sink into a self-defeating spiral: Higher debt leads to harsher austerity, growing social instability and deeper economic problems. Governments could find it even harder to pay their bills.
The pain is already intense. Portugal's unemployment rate hit a record 14 percent at the end of last year. Ireland's economy contracted a worse-than-expected 1.9 percent in the July-September quarter of 2011. And Greece reported that its already basket-case economy shrank by 7 percent in the October-December quarter of last year.
"This isn't a healthy situation," says Peter Morici, an economist at the University of Maryland.
Under a deal approved Tuesday by the 17 countries that use the euro and the International Monetary Fund, Greece will get a $172 billion bailout in exchange for accepting another dose of austerity that includes laying off 15,000 civil servants and slashing the minimum wage by 22 percent.
Progress has been made in the bond market, where interest rates on government bonds have declined. That has made it cheaper for some indebted countries to borrow.
But the drop in rates might not last. And the lower rates probably have less to do with budget-cutting than with what the countries' central banks are doing: They're buying bonds, which pushes down rates, and providing low-cost loans for banks to do the same.
The AP's Global Economy Tracker illustrates how countries that have imposed austerity measures to slash costs have actually ended up with bigger debt problems:
Portugal cut pensions, reduced public servants' wages and raised taxes, starting in 2010. Yet in the third quarter of 2011, government debt equaled 110 percent of Gross Domestic Product. That was up from 91 percent a year earlier.
In Ireland, middle-class wages have been cut by 15 percent and the sales tax boosted to 23 percent, highest in the European Union. But its debt amounted to 105 percent of economic output in the third quarter of last year; a year earlier, it was 88 percent.
In Britain, Prime Minister David Cameron staked his political future on his austerity plan. Government debt ratios, though, reached 80 percent in the third quarter of 2011, up from 74 percent a year earlier. And Moody's this month cut its outlook on Britain's prized AAA credit rating from "stable" to "negative."
In Greece, two years of austerity programs have devastated the economy and triggered riots. Still, the government's debt equaled an alarming 159 percent of the country's GDP in the July-September quarter of 2011. That was up from 139 percent a year earlier.
Norway, by contrast, has a strong economy and has avoided painful austerity measures. And its debts dropped to 39 percent of GDP in the third quarter, from 43.5 percent in the same quarter of 2010.
Simple math explains why austerity can worsen government debt: If spending cuts and tax increases tilt a country into recession, GDP shrinks. So debt doesn't even have to grow to become a bigger burden on a contracting economy.
"You can't fix the debt-to-GDP problem if GDP is falling," says David Kelly, chief market strategist for JP Morgan Funds.
Recession also adds strains to the budget. Tax revenue dries up. Spending on unemployment benefits and other social services rises.