Austerity or Stimulus

Since the European Debt Crisis, some countries have not recovered from the Crisis, such as Italy and Greece. The European Union is pushing these countries to achieve the budget deficit targets; to achieve the goals, many of these governments which are stuck in theirs are forced to apply austerity policies for cutting their government expenditures in order to reduce their government deficits. However, such policy  often faces enormous unpopularity among these countries' populations.

Population does not like any kind of austerity policy, though sometimes they may understand it is necessary at some point. Austerity policy involves tax increases and/or expenditure cuts. Tax increases mean people receive lower disposable incomes; in addition, expenditure cuts are likely to lead to cuts in benefits and subsidies which are bad for individuals as well as businesses. In addition, austerity policy is not helpful of stimulating economic growth, so governments do not like it either. For the governments like Italy and Greece, they are forced to adapt to austerity policies due to the pressure from the European Union and their creditors; however, their governments are trying to apply more moderate austerity policies. Their concerns are reasonable that with more generous budget policies, it is helpful for generating better economic performances, which can help them to be capable of paying back their loans in the long term. However, their creditors do not trust them, they believe that the governments would just give away more benefits which merely makes people lazy and does not help to generate better economies. Moreover,  these creditors are also evaluated by others, their creditors as well as their owners, so due to the evaluation pressure, the creditors are also forced to be short-sighted and push these governments to adapt to austerity policies.

Overall, austerity policy is not going to help these countries in the long term,and likely to create opposition from these countries' populations, which could lead to political conflicts and chaos within these countries as well as Europe (and even the world).