In the aftermath of the Great Recession, Eurozone emerges debt crisis. In Europe, the crisis highlighted the fact that Greek public sector debt was much higher than previously thought. Before 2007, bond yields in the Eurozone had been very low. But, after the credit crisis and realising the true levels of Greek debt, bond yields in Europe rose rapidly. People became nervous about holding Eurozone bonds. The rise in Europe bond yield created a new panic. European governments felt the necessity of cutting budget deficits (‘austerity’).Several European countries, including Greece, Italy and Spain, have turned to austerity measures as a way to alleviate budget concerns. Austerity results in Europe has been as predicted by macroeconomics. This involved cutting government spending and higher taxes. However, in a recession, this fiscal austerity lead to lower aggregate demand and worsened the recessionwith unemployment rising to record levels and debt-to-GDP ratios rising, despite reductions in budget deficits relative to GDP.