Austerity measures do reduce the budget deficit of countries effectively. Massive budget deficits can suffocate the broader economy. The Eurozone’s debt problem is caused by the unsustainable levels of governmental spending on overly generous welfare state programs, a bloated public sector, overly generous pension levels, and state subsidies. Implementing stringent austerity measures will help to discipline debt-ridden governments by cutting public budgets, reducing the number of public sector workers, curbing social benefits, and narrowing the scope of the welfare state.
Example
Greece's budget deficit decreased from €24.7bn in 2009 to just over €5bn in 2011, which is 13.4% of GDP between 2009 and 2012, showing that austerity measures achieve its principal objective. Budget deficit can cause serious problems in countries’ economy like inflation and crowding out of private sector, as private sector will have lower funds to spend and invest.